January 12, 2017: Mark Carney, governor, Bank of England, said the immediate risk posed by Brexit to the UK economy has declined. Carney said, however, that the overall level of risk is still ‘elevated’. The risk is greater for continental Europe than for the UK, he said.
The governor also told members of the Treasury Select Committee that a period of transition was ‘highly advisable’. “If such a transition is not put in place, in our view it will have consequences. We will work to mitigate those consequences as much as possible,” he said.
Carney said the UK should concentrate on stable access to financial markets after Brexit.
Last week, the Bank of England’s chief economist, Andrew Haldane, admitted that some criticism of economic forecasts about the immediate impact of a Brexit vote were justified.
Carney told the committee that economic forecasting had improved since the financial crisis, by being more pessimistic. “As you’d expect a bunch of dour central bankers to be, we’re focused on the downside and less focused on how everything could turn out well, but what could go really wrong… and where can we potentially mitigate that. We do have to ask ourselves continually what could go wrong. We don’t have to see a ghost behind every corner, but we do have to ask ourselves what could go wrong.”