Bank of England governor Mark Carney has warned the government about the potential economic ramifications of crashing out of the EU with no deal.
According to the Financial Times, Carney has warned such an exit could lead to a property crash resulting in house prices falling by a third.
The governor told Cabinet ministers that in the event of no-deal the bank would not be able to cut interest rates, which it did after the result of the Brexit referendum in 2016. He says unemployment and inflation would rise.
Carney, who this week committed to extending his term at the bank until 2020, warned ministers that house prices would be 35 per cent lower three years after a no-deal Brexit than would otherwise have been the case.
He said this would be driven by increasing unemployment, higher interest rates, depressed economic growth and higher inflation.
The FT reports Carney saying that if the government agreed a deal based on the recent exit-plan presented at Chequers then the economy would outperform current forecasts because it would be better than the bank’s assumed outcome.