Brexit U-turn: Bank of England boss says EUROPE needs to fear exit...

Brexit U-turn: Bank of England boss says EUROPE needs to fear exit as UK risk subsides

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THE Bank of England is not having a Michael Fish moment, despite policymakers wrongly warning about the impact of a Brexit vote, Mark Carney claimed today.

Appearing before MPs, the Governor insisted Brexit was the biggest risk to Britain in the run-up to the referendum but conceded this was no longer the case.

In fact, the UK’s exit from the European Union (EU) is now a bigger threat to the continent than Britain, said the Canadian chief.

He told the Treasury Select Committee: “There are greater financial stability risks on the continent in the short-term, for the transitions, than there are for the UK.”

Mr Carney added: “In the run-up to the referendum we felt that it was the largest risk… The scale of the immediate risks around Brexit have gone down.”

Yet Mr Carney disagreed with the Bank’s chief economist Mark Haldane, who last week compared Brexit forecast failures to Michael Fish’s notoriously botched 1987 weather prediction.

In relation to the comments, the Governor said: “One of the advantages of banishing group think is that one doesn’t always agree with everything that is said by colleagues.”

The chief added: “The risk analysis we made around Brexit was correct.”

Mr Carney sald actions by the Bank had helped the economy’s stellar performance following the referendum.

He told MPs: “I do think we helped make the weather.”

But the chief repeated warnings that there would be a slowdown In Britain’s economy this year, thanks to the vote to leave.

As part of exiting the custom union, the Governor said it’s “highly advisable” that there is a transition phase agreed early on – or there could be risks to Britain’s financial stability.

Mr Carney said HSBC chairman Dougals Flint had used a “decent analogy” when he told MPs that London’s financial ecosystem was like a Jenga tower, where if you pull one small piece out nothing could happen or it could have a dramatic impact.

The Bank governor said: “Just like when you play Jenga, you start early and there are some pieces which you can take out without imperilling the tower.”

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