View more on these topics

Carney denies BoE is ‘politically involved’ in Brexit debate


Bank of England governor Mark Carney says the central bank has remained independent in the Brexit debate, despite its recent warnings on economic uncertainties around the referendum.

Speaking to the Treasury committee, Carney says there is “no possibility” of the central bank having been influenced by the Government on taking a firm position on the EU referendum, saying “we have not supported a side campaign”.

Carney responded to accusations from Conservative MP Jacob Rees-Mogg, who backs the Leave campaign, that the BoE governor had become “politically involved” in the Brexit debate, saying this “fundamentally undermines the standing of the Bank of England”.

Carney says: “[The BoE has] a responsibility under our remit to report not just the current trade-off that may hold in terms of returning inflation to target in a sustainable manner, but the principle risks around that trade-off.”

He says the referendum decision could “materially change the trade-off”.

But Rees-Mogg says: “I think you have become politically involved…why should anybody trust you to set interest rates?”

Carney’s comments come after the BoE was vocal on the impacts a Brexit might have on the economy.

In its latest inflation report, the BoE statesa vote to leave the EU could “materially alter the outlook for output” and “there are increasing signs that uncertainty associated with the EU referendum has begun to weigh on activity”.

However, Carney says he does not expect to include any further warnings on Brexit in the next Monetary Policy Committee meeting on 16 June.

He says: “We, in my judgement, have highlighted the key economic issues, including short-term uncertainty and the potential change in the trade-off between output and inflation, so I would not expect something substantially different to be said.”

However, he did not rule out a change in thought among MPC members on the impact of a Brexit vote, saying “I would not exclude the possibility that there is some evolution of the committee’s thinking”.

He adds: “I’m one member of the committee, we’ll have a few more weeks of data, things will move around, there may be a judgement around that.”

The impact of the EU referendum continues to be seen in markets, with today seeing UK sterling rise 0.5 per cent against the dollar at $1.4532. The jump came after a poll from the Telegraph shows 55 per cent back “remain”, while 42 per cent back leaving the EU.

The poll shows older voters, Conservative supporters and men now support the remain campaign for the UK to stay in the EU.

The BoE already said sterling could “perhaps sharply” fall in the event of Brexit.

Since the start of 2016, major banks, including Goldman Sachs and other institutions, have estimated sterling could drop 20 per cent if the UK leaves the EU.



Bank of England chief economist: IFAs have no clue on pensions

Bank of England chief economist Andy Haldane has suggested advisers do not understand pensions while admitting he too cannot make sense of the increasingly complex pensions market. Speaking at the annual dinner for think-tank New City Agenda in London last night, Haldane said financial education in schools was lacking in teaching how to apply maths […]


Advisers slam BoE economist’s ‘irresponsible’ comments

Claims made by the Bank of England’s chief economist that advisers do not understand pensions have been branded “extraordinary” and “irresponsible” by the industry. Advisers say the comments damage the reputation of financial services and undermine efforts to boost consumers’ confidence in the sector. Speaking at an event for think-tank New City Agenda in London […]


BoE slashes UK growth forecast as it warns on Brexit

Economic activity is expected to further decelerate in the second quarter this year amid fears of the UK leaving the European Union, the Bank of England has warned, as the Monetary Policy Committee votes to keep rates on hold. The BoE’s May inflation report, published today, says activity growth slowed in the first quarter of […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm