Carney Hits Back on Brexit Charge as Poll Shows Leave Ahead

  • Bank of England governor says he has “duty” to judge risks
  • Leave campaign maintaining steady poll lead with week to go

How Should Central Banks Deal with Brexit?

Mark Carney hit back against critics who accused him of supporting the U.K.’s membership in the European Union as a new poll showed the Leave campaign holding its lead ahead of next week’s referendum.

Brexit Watch: The pound, the polls, and the probability of Brexit, all in one place

The Bank of England has “a duty” to report its “evidence-based judgment” to parliament and the public, the institution’s governor wrote in a letter to Conservative lawmaker and “Leave” campaigner Bernard Jenkin. Carney’s letter was sent in response to one from Jenkin, dated June 13 and published on the BBC’s website, in which the politician warns the governor about rules banning “any public comment” during a pre-referendum "purdah" period, which the BOE has chosen to impose voluntarily.

Meanwhile, a poll by Ipsos Mori for the Evening Standard newspaper released on Thursday morning showed 53 percent support for leaving with 47 percent for Remain, excluding those who said they didn’t yet know. The telephone poll of 1,257 adults, the latest in a string of surveys showing a steady lead for anti-EU campaigners, was conducted from June 11 to June 14.

In his letter, Carney said Jenkin’s correspondence “demonstrates a fundamental misunderstanding of central-bank independence,” adding that he had not made his personal views known. “All of the public comments that I, or other bank officials, have made regarding issues related to the referendum have been limited to factors that affect the bank’s statutory responsibilities and have been entirely consistent with our remits,” said the letter, which was posted on the BOE’s website.

Bitter Debate

With a week to go until the Brexit vote, the exchange comes against a backdrop of an increasingly bitter debate in which the BOE has become embroiled. Writing in the Daily Telegraph newspaper, senior Conservatives Michael Howard and Iain Duncan Smith accused the BOE and the Treasury of a “woeful failure” to present “a fair and balanced analysis.” Prime Minister David Cameron, who wants the U.K. to remain in the EU, posted on Twitter that the “Leave” campaign’s criticism of the BOE was “deeply concerning.”

While the central bank has pledged to respect a purdah period until the vote, its nine-member Monetary Policy Committee is due to publish a monthly policy statement at noon Thursday and that may contain some commentary on how the referendum is affecting the economic outlook. Officials will probably keep the key rate at 0.5 percent, having said they will interpret economic data surrounding the vote with extra caution.

Jenkin said in an interview on BBC Radio 4’s Today program that Carney had “reacted very, very aggressive toward me” and that the BOE “has to be very careful what it says.”

Carney stressed in his letter that the BOE is not officially bound by the purdah rules but has “voluntarily” agreed to them. He noted the bank "must continue to pursue its statutory objectives" during the period, and would communicate accordingly.

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