Carney Wants Clarity on Timing of Britain’s EU Referendum

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Bank Of England Governor Mark Carney
Bank Of England Governor Mark Carney said the vote should take place “as soon as necessary.” Photographer: Chris Ratcliffe/Bloomberg

Bank of England Governor Mark Carney indicated he’s in favor of Prime Minister David Cameron holding an early referendum on Britain’s European Union membership.

The vote should take place “as soon as necessary,” Carney said on BBC Radio on Thursday. “It’s in the interests of everybody that there is clarity about the processes and the question and the decision.”

Cameron, who won a majority in Parliament in this month’s election, has pledged to hold a referendum by the end of 2017 on whether Britain should stay in the EU. He first wants to renegotiate membership terms, and Chancellor of the Exchequer George Osborne says the U.K. will take a tough line in talks.

Carney tried to sidestep the timing question, telling the interviewer “that’s all you’re going to get,” and never made a specific comment on a preferred date. He’s previously waded into fraught political issues, and his remarks in the buildup to last year’s Scottish independence referendum were seized upon by pro-union campaigners.

Cameron still plans to hold the referendum by the end of 2017, and will do so earlier if possible, his spokesman Jean-Christophe Gray told reporters in London.

“The only priority here is about getting the right deal for Britain,” Gray said. “The prime minister is confident he can get that bit; the final decision is for the British people in a referendum.”

Investment Impact

Carney said that while companies are aware of the potential political uncertainty developing before the EU vote, there is as yet no sign it’s affecting investment decisions.

“What they’ve been telling us, and we see this in the statistics, is that they have not yet acted on that uncertainty,” he said. “Or to put it another way, they are continuing to invest, they’re continuing to hire.”

The referendum pledge was a major battleground during the election campaign, with former Labour Prime Minister Tony Blair warning that the specter of Britain leaving the EU would inflict “chaos” on the economy. In February, British Chambers of Commerce Director General John Longworth called on the Tories to “get on with it quickly and move on” to avoid uncertainty for business.

Britain sends almost half its exports of goods and services to the EU -- 227 billion pounds ($358 billion) last year -- and foreign companies operating in the U.K. gain tariff-free access to a market of 500 million people in 28 countries.

“One of the big advantages this economy has is access to the European market,” Carney said. “It’s the largest economy in the world, it’s the largest investment destination, it’s the largest investor in the U.K.”

Cameron’s bid to seek a better deal for Britain in areas such as migration has already run up against resistance from Germany and France, which have signaled their unwillingness to reopen European treaties.

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