BOE’s Carney backs May’s Brexit plan

Bloomberg

Mark Carney gave his seal of approval to the transition deal agreed by Prime Minister Theresa May’s 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 (BOE) 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 UK’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.” The governor’s intervention follows similar endorsements from UK businesses, which could assist May as she tries to convince skeptical lawmakers to back her plan. The BOE will give more details on its views on November 29, when it will provide the Treasury Committee with an analysis of May’s plan, as well as a no-deal outcome.
“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.
BOE officials have regularly stressed that the shape of the final Brexit deal could have implications for policy in either direction, and that a no-deal outcome could lead to higher interest rates.