UK economy 'not prepared' for no-deal Brexit: Bank of England chief

UK economy 'not prepared' for no-deal Brexit: Bank of England chief

LONDON: Britain's economy is "not yet prepared" for a disorderly no-deal departure from the European Union next month, Bank of England governor Mark Carney warned Thursday (Feb 7).

"Although many companies are stepping up their contingency planning, the economy as a whole is still not yet prepared for a no-deal no-transition exit," Carney told reporters after the bank slashed its economic growth forecasts.

READ: Bank of England slashes UK growth outlook on Brexit

As British Prime Minister Theresa May attempts to rescue her withdrawal agreement, Carney warned that the "fog of Brexit" has sparked volatility across financial markets, the economy, and for businesses.

"The UK is leaving the European Union, not leaving Europe, and it is pursuing an ambitious (and) broad economic and security partnership," Carney said.

"But the exact form of that partnership - how it will be settled and when that settlement will take effect - is still unclear.

"The fog of Brexit is causing short term volatility in the economic data and more fundamentally it is creating a series of tensions in the economy. Tensions for business."

He added: "Given the dynamic of (Brexit) negotiations, we are now assuming uncertainty remains elevated for a while and that financial conditions stay tighter for longer."

Source: AFP/aa