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It's my job to come straight on Brexit risks, insists Bank of England chief

By Holly Williams

Published 25/05/2016

Bank of England chief Mark Carney
Bank of England chief Mark Carney

Bank of England boss Mark Carney has insisted it is his job to "come straight with the British people" over the risks of a Brexit vote and has denied accusations of becoming politically involved.

His heated exchange with MPs came the day after a Treasury report claimed a Leave vote would put 820,000 jobs at risk - including 15,000 in Northern Ireland - over the next two years.

In a fiery meeting with politicians, Mr Carney defended the Bank's warning earlier this month that a vote to quit the EU could trigger a recession in the UK, hit jobs and lead to higher interest rates for borrowers.

But Jacob Rees Mogg, MP and member of the Treasury Select Committee, accused Mr Carney of becoming "politically involved" and of colluding with Chancellor George Osborne to produce the same Brexit "propaganda" as the Treasury.

However, Mr Carney insisted there was "no possibility of undue influence coming from the Treasury".

He added the Bank was "apolitical" and said it had a responsibility to warn the Chancellor and the public about the economic risks of a Brexit.

"It's important not just to those in financial markets, but it's also important to come straight with the British people about that," Mr Carney insisted.

All nine members of the Bank's rate-setting committee agreed that a Brexit could have a "material" impact on growth and inflation, he told MPs.

Fellow Bank policy-maker Martin Weale agreed that vote to leave the EU would "increase the risk of recession".

The hearing came after a controversial Treasury report on Monday warned the UK could fall into a technical recession - which is when GDP falls for more than one consecutive quarter - lasting for a year if people voted for a Brexit.

Mr Carney refused to rule out further intervention in the debate, with the Bank set to announce its next interest rate move and minutes of the meeting on June 16 - a week before the June 23 vote.

However, he added that the broad issues had been set out.

Since the stark warning in the Bank's inflation report earlier this month, Mr Rees Mogg has called for Mr Carney to be sacked and has claimed that he acted irresponsibly.

But Mr Carney stood by his comments in the report. He told MPs: "We have a responsibility to discharge our remit, and to the British people, who don't want risks hidden from them.

"They expect us to come straight and take action to mitigate those risks."

He confirmed there had been a "series of conversations" with Chancellor George Osborne, but gave Mr Rees Mogg short shrift when accused of political involvement and of colluding with the Government.

"I don't think it's worth replying," said Mr Carney.

Belfast Telegraph

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