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Looming EU vote posing risk to British economy, Mark Carney says Looming EU vote posing risk to British economy, Mark Carney says
(35 minutes later)
The Bank of England governor has said Britain’s economy appears to be losing steam ahead of June’s EU referendum, with the looming vote posing the biggest risk to UK growth. The Bank of England governor has said Britain’s economy appears to be losing steam before the EU referendum, with the looming vote posing the biggest risk to UK growth.
Mark Carney, who has previously warned that Britain’s economy could struggle to grow after a decision to quit the European Union, said during a trip to Stockport that the referendum itself posed a significant risk to the economy.Mark Carney, who has previously warned that Britain’s economy could struggle to grow after a decision to quit the European Union, said during a trip to Stockport that the referendum itself posed a significant risk to the economy.
He told the Stockport Express newspaper: “In the very short term the economy appears to be slowing, probably related to issues around the referendum. One of the responsibilities of the Bank of England is to manage risk and financial stability.He told the Stockport Express newspaper: “In the very short term the economy appears to be slowing, probably related to issues around the referendum. One of the responsibilities of the Bank of England is to manage risk and financial stability.
“Risks around the referendum are the biggest risks facing the UK economy, we have contingency planning to decrease the potential impacts of uncertainty.”“Risks around the referendum are the biggest risks facing the UK economy, we have contingency planning to decrease the potential impacts of uncertainty.”
Official figures this week showed economic growth slowed markedly in the first quarter of this year to 0.4% from 0.6% in the final three months of 2015. But economists are divided over how much of the slowdown could be blamed on the referendum.Official figures this week showed economic growth slowed markedly in the first quarter of this year to 0.4% from 0.6% in the final three months of 2015. But economists are divided over how much of the slowdown could be blamed on the referendum.
Carney told the Stockport Express that risks around the 23 June referendum and global headwinds meant that when interest rates do rise from their record low of 0.5%, they would do so only “modestly”.Carney told the Stockport Express that risks around the 23 June referendum and global headwinds meant that when interest rates do rise from their record low of 0.5%, they would do so only “modestly”.
“Our view is in general the economy is performing pretty well. Unemployment is coming down, it is around 5% in the north west and slightly higher nationally.“Our view is in general the economy is performing pretty well. Unemployment is coming down, it is around 5% in the north west and slightly higher nationally.
“Wages are growing slowly and over time should pick up. Over time it will likely be appropriate to make modest and gradual interest rate rises. There are big forces globally that are putting downward pressure on prices.”“Wages are growing slowly and over time should pick up. Over time it will likely be appropriate to make modest and gradual interest rate rises. There are big forces globally that are putting downward pressure on prices.”
The Canadian also told the newspaper that he had to remain neutral on the question of whether ‘in’ or ‘out’ is the best option in the EU referendum. The Canadian also told the newspaper that he had to remain neutral on the question of whether in or out is the best option in the EU referendum.
“It is a big decision for the people of Stockport, the north-west and the UK,” he was quoted as saying.“It is a big decision for the people of Stockport, the north-west and the UK,” he was quoted as saying.
Leaving interest rates on hold, as expected, earlier this month, the Bank’s monetary policy committee said a vote to leave the EU could harm economic growth and have a serious impact on the pound and other UK assets. The committee said uncertainty ahead of what was expected to be a close vote appeared to be weighing on investment decisions, and that economic growth could slow as a result. Leaving interest rates on hold, as expected, this month, the Bank’s monetary policy committee said a vote to leave the EU could harm economic growth and have a serious impact on the pound and other UK assets. The committee said uncertainty before what was expected to be a close vote appeared to be weighing on investment decisions, and that economic growth could slow as a result.
Earlier on Thursday, campaigners for Britain to leave the EU hit back at studies claiming an exit would be bad for growth and living standards with a report from eight economists that argued the UK would thrive as an independent country.Earlier on Thursday, campaigners for Britain to leave the EU hit back at studies claiming an exit would be bad for growth and living standards with a report from eight economists that argued the UK would thrive as an independent country.
The Economists for Brexit report said output would be higher, the City of London would thrive, unemployment would fall and the trade deficit would narrow in the event of a no vote in the in/out referendum.The Economists for Brexit report said output would be higher, the City of London would thrive, unemployment would fall and the trade deficit would narrow in the event of a no vote in the in/out referendum.