Mark Carney today was questioned by MPs over his warnings about outcome from Brexit. Treasury Select Committee Chair questions the Governor of the Bank of England over his ‘over-egging’ of the economic dangers of a Brexit and his subsequent encouragement to overreact following the results of the EU vote.
Carney appeared calm despite the questioning, claiming he was ‘absolutely serene’ and welcomed the signs of stabilisation in the economy. He explained that the Brexit had impacted the economy but the contingency measures put in places before the vote reduced negative consequences.
Further questions from MPs included Jacob Rees-Mogg, a Conservative back-bencher, questioning the necessity of the ‘dire warnings’ issued ahead of the referendum. Quick to take issue with the use of ‘dire’, the Bank of England Governor noted that there it was not a ‘dire’ warning, and there was not a deep recession, but simply, that there was the prospect of a material slowing in growth and a notable rise in inflation which voters needed to be aware of.
Carney furthered this was the explanation that the economy was ‘delicate and febrile’ ahead of the referendum, but that the financial system had ‘sailed through’ what was a surprise result to the vast majority of financial market participants. Adding that the Bank of England has made it very clear in its Inflation Report that it expected economic indicates to bounce back after the initial reaction to the Brexit vote.
He advised that the public must view the economic impact with the right perspective, despite the growth rate being approximately half of what it was ahead of the vote.
His closing remarks referred to the major decisions that Parliament would be making, in the coming weeks and months, with regards to our relationship with Europe and the rest of the world. Also noting that broader productivity and strategies would be catalysed by these actions and final conclusions will need to wait until clear decisions have been made.