Illustration by Paul Ryding for POLITICO
If Brexit doesn’t capsize the British economy, it’ll be in no small part thanks to Mark Carney. The governor of the Bank of England has been one of the loudest voices warning about the dangers of the United Kingdom crashing out of the European Union without an agreement. Although he so far has shied away from any solid forecasts about the impact of a no-deal Brexit, he warned it is “quite an extreme” and “highly undesirable” scenario that would result in a hike in inflation worse than that caused by the post-referendum dive in sterling, thanks to the added impact of higher trading barriers and possible supply disruptions. All that would translate into a squeeze on real household incomes. “Parties should do all things to avoid it,” Carney said last summer.
Warnings like these have put the 53-year-old Canadian economist on the political front line — his assessments dismissed by his critics as scaremongering. The Tory Brexiteer Jacob Rees-Mogg has called Carney “the enemy of Brexit” and “the high priest of Project Fear.” The Bank of England was lambasted after the Brexit vote for gloomy forecasts predicting a recession that never happened. But Carney’s defenders point out that it is likely the Bank of England’s forceful intervention into the economy that prevented the bank’s predictions from materializing.
Once the U.K. leaves, it will be again up to the Bank of England to smooth the journey to any sunny uplands of Brexit. Even if the U.K. benefits from the freedom to make new trade deals, there will inevitably be a period of adjustment as the economy reorients itself, which Car
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