A no-deal Brexit could leave Britain facing a financial crisis on the scale of the 2008 bust, the Bank of England governor has warned.
Addressing Theresa May’s cabinet, Mark Carney “painted a bleak economic picture” of unemployment rates in double figures, house prices dropping by a third over three years, and stalled transport links with the EU, reports The Guardian.
The PM “had intended her three-and-a-half-hour cabinet meeting to review no-deal contingency plans and to send a signal to the EU that Britain was prepared for the prospect of Brexit talks failing”, says the Financial Times.
Instead, Carney and Chancellor Philip Hammond “joined forces to deliver a blow-by-blow account of why such a scenario would be economically damaging and that there would be little the Bank of England or Treasury could do about it”, the newspaper continues.
Several sources told The Guardian that Carney had compared the outcome of a no-deal Brexit with the fallout from the 2008 crash.
One cabinet minister told the paper: “The Government wouldn’t just stand by. It didn’t in 2008. He wasn’t saying it was all going to happen but I think there is a recognition that you do have to contemplate the worst-case scenario.”
Despite his dire predictions, “multiple sources reported that the Cabinet Brexiteers did not challenge Carney at all as he made his speech”, adds Politico’s Jack Blanchard.
Indeed, The Times reports that Vote Leave campaigner Andrea Leadsom noted that a housing crash would hit older voters – a demographic group that had favoured Leave.
An insider told the paper: “Carney was very spicy. You saw a few eyebrows going up around the room but nobody challenged him.”