14 February 2020

Reuters: Carney sees silver lining after Brexit hit to UK economy

For years, Bank of England boss Mark Carney warned of the economic risks of Britain leaving the European Union. Now that it has happened, he says there could be a silver lining in Prime Minister Boris Johnson’s plans to boost growth.

Speaking to Reuters a month before he ends his nearly seven-year term as BoE governor, Carney said Britain was moving to address its main economic problem - weak productivity. [...]

“In an environment where everything is getting a fresh look, it’s fertile ground for taking a step back and making bigger changes than otherwise might have been made,” Carney said when asked about potential upsides for the economy from Brexit.

 

“It’s early days but there are several initiatives - the budget will be telling - that suggest that some of these opportunities are being grasped,” he said, seated at a table in his office that has been used by BoE governors for over 200 years, its leather top worn thin by use.[...]

Carney, who angered many supporters of Brexit with his comments, has not changed his mind about that, even if Johnson says leaving the EU will unleash Britain’s potential.

“It’s absolutely clear in the data, whether both the survey data and the hard data, that it’s had an impact, a notable impact on investment and of course that flows through to productivity,” he said. [...]

Still, Brexit could prove to be “a conceptual positive” for Britain as it finds its feet outside the EU, Carney said.

“It is a major reordering of our relationship not just with the European Union but our trading relationships with the rest of the world and it is prompting a reassessment of economic policy, structural economic policy in the country,” he said.

Carney said there were signs of a quick upturn in confidence in Britain after Johnson’s election win ended the uncertainty about whether Britain really would leave the EU on Jan. 31.

“We are already seeing a rebound in confidence, business confidence and to some extent a firming of consumer confidence,” he said. [...]

Full article on Reuters

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