Carney Slams Critics as Bank of England Boosts Brexit Response

  • UKIP leader Farage accuses governor of ‘talking down Britain’
  • BOE head signaled more policy easing in coming months

Mark Carney, governor of the Bank of England (BOE), speaks during a news conference in the City of London, U.K., on Thursday, June 30, 2016.

Photographer: Chris Ratcliffe/Bloomberg

Mark Carney is hitting back against his critics, and he reckons he has the evidence to back him.

With the pound at a three-decade low and confidence in the economy faltering, the Bank of England governor wants the nation’s warring politicians and those who accused him of compromising the bank’s independence to remember that he warned this was likely.

Mark Carney speaks on July 5.

Photographer: Chris Ratcliffe/Bloomberg

“What we said in terms of the risks to the economic outlook, in terms of the risks to financial stability -- does anyone in this room not think that those risks have begun to manifest?” Carney asked members of the press and financial industry after a speech in London on Thursday. “So we did our job.”

The governor’s comments before the June 23 referendum, including a warning that Brexit could lead to a recession, made him a target for the now victorious “Leave” campaign. Even as Carney went on the attack on Thursday, U.K. Independence Party leader Nigel Farage took to Twitter to accuse him of “once again talking down Britain.”

Some of his biggest critics look increasingly close to power after the vote prompted the resignation of Prime Minister David Cameron. Chancellor of the Exchequer George Osborne, the man who appointed the Canadian to run the BOE, and former London Mayor Boris Johnson, who has publicly defended him, have ruled themselves out of the Tory leadership contest.

Conservative lawmaker and Brexit campaigner Michael Gove, who announced his candidacy for the leadership this week, praised Carney’s actions on Friday. During the debate in the run-up to the vote, he said Britons had “had enough of experts and organizations with acronyms saying they know better.”

Political Squabbles

The new government would “be crazy to get rid of him” but “it really depends who the Chancellor is,” said Alan Clarke, an economist at Scotiabank. “Anyone that decides to fire him or tell him not to stay on would throw more petrol on the flames. What you need now is stability and continuity.”

The Conservative Party has yet to choose a new leader, and politicians campaigning to leave the EU have been slow to put forward plans of what a post-Brexit relationship with the bloc will look like. The U.K.’s exit strategy -- as well as new agreements made with EU leaders and their economic ramifications -- may remain unknown for months to come.

Clear Plan?

Osborne said Friday that while the BOE can support demand, the government must “reduce uncertainty by moving as quickly as possible to a new relationship with Europe.”

Carney also had some pointers.

“In my experience, a plan that is clearly articulated and transparently executed is best of all,” Carney said. “A plan for the U.K.’s current challenges would include a comprehensive strategy for engaging with the EU and the rest of the world -- including clarifying the U.K.’s future trading arrangements, calibrating its openness to migration, ensuring the continuity of capital flows, and confirming the appropriate regulatory framework for the U.K. financial system.”

Amid squabbling over who should be top of both the U.K.’s two main political parties, the BOE has stepped into the leadership vacuum with Carney pledging live on television -- twice -- to support the banks and take any measures needed to bolster the economy. His message that he’s being proactive came with a thinly veiled dig at his political counterparts.

“It would be irresponsible of me or any of my other colleagues to walk away from those obligations,” he said. “Because those are our obligations under statute.”

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