Probability of No-Deal Brexit Has Decreased, Mark Carney Says

Published 16/12/2019, 19:03
© Reuters.  Probability of No-Deal Brexit Has Decreased, Mark Carney Says

(Bloomberg) -- Boris Johnson’s victory in last week’s general election means the possibility of the U.K. crashing out of the European Union has subsided, according to Bank of England Governor Mark Carney.

“The worst-case scenario is effectively a no deal, disorderly Brexit. The probability of that scenario has gone down because of the election result and the intention of the new government,” Carney said, speaking in a press conference after the publication of the central bank’s Financial Stability Report. “The scenario itself and the risks that we protect the system against has not itself changed, it’s just become less likely.”

Carney emphasized that the financial system is prepared for such a an outcome, with the U.K.’s seven largest lenders all passing the bank’s latest stress test, showing they’re strong enough to continue lending even in a global downturn or in the event of Britain leaving the EU without a trade agreement.

Johnson has pledged to take the U.K. out of the bloc on Jan. 31, and there will then be just 11 months to conclude a new trade deal. That raises the prospect of a cliff-edge at the end of 2020, according to trade experts.

“What people would expect us to do is to continue to ensure that the system is ready, so that the financial system is not forming a constraint to whatever negotiations are under way or discussions are under way, but is part of the buffer for whatever happens,” Carney said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.