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20 November 2018

Bloomberg: Carney backs May's Brexit plan with case for longer transition

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Mark Carney gave his seal of approval to the transition deal agreed by Prime Minister Theresa May with the European Union, and signalled that he would welcome even longer for the UK to adjust.

In his first public comments on the government’s draft agreement, the Bank of England governor united with other central bank officials to warn of the dangers of leaving the European Union without a smooth exit.

He also flagged the benefits of extending the U.K.’s post-exit implementation period, saying that it takes about four years to agree the average trade deal-- about double the current transition, which currently gives a “very limited window to negotiate.” [...+

“We welcome the transition arrangements in the withdrawal agreement,” Carney said. “We also take note of the possibility of extending that transition period.” The option to extend that period is there for a reason, he added.

‘More Visible’

While Carney refused to say if a chaotic exit has become more likely, he said that the threat is “uncomfortably high,” and his colleague, Michael Saunders, described the risk of such an outcome has “become more visible.”

Chief Economist Andy Haldane also weighed in, saying that uncertainty was starting to impact businesses and could lead to weaker growth in the fourth quarter. [...]

Full article on Bloomberg

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