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Bank chief Mark Carney should be fired over Brexit recession warning - Tory MP

Published 12/05/2016

Boris Johnson has said uncontrolled immigration is too high under EU rules as he joined the Vote Leave battle bus tour.
Boris Johnson has said uncontrolled immigration is too high under EU rules as he joined the Vote Leave battle bus tour.

Bank of England chief Mark Carney should be fired for warning that Brexit may trigger recession, a Tory MP has said.

Commons Treasury select committee member and prominent Leave campaigner Jacob Rees Mogg reacted with anger to the governor's intervention, insisting he had become unacceptably partisan following the Bank's Monetary Policy Committee announcing it believed withdrawal from the EU could lead to an economic downturn.

Mr Rees Mogg said the governor deserved to be sacked because it was like the Bank announcing during a general election campaign what the economic impact of a Tory or Labour win would be.

"Mark Carney has intervened speculatively in a political matter. It's the responsibility of the Monetary Policy Committee to be independent, and he's decided to make a deeply political choice in a referendum which is the concern of the British people, and therefore, he should be fired," the MP told Sky News.

Mr Rees Mogg accused the governor of deliberately talking down sterling for political reasons.

"It is quite extraordinary, and I think unprecedented, for a governor of a central bank to tell people to short his own currency," he said.

The Commons Treasury committee member expressed serious concern over the independence of the Bank.

"For some reason in this referendum it has decided to take a highly partisan position, and this is very unfortunate because it undermines the whole basis of the Bank's independence.

"And if they are partisan on the European issue, are they also setting interest rates for the convenience of the Government rather than for the broader economy?" Mr Rees Mogg said

Supporters of EU withdrawal accused the Governor of risking a self-fulfilling crisis, as the London markets fell on the Bank's warnings of depressed growth, increased inflation and unemployment and a fall in the value of the pound if Britain votes for Brexit on June 23.

Prime Minister David Cameron insisted it was the Bank's job to warn of risks to security. And he accused the Leave camp of "celebrating insecurity" after prominent backer Peter Hargreaves said the stimulus provided by uncertainties outside the EU would be "fantastic".

Speaking to reporters following the publication of the latest quarterly inflation report from the Bank's Monetary Policy Committee (MPC), Mr Carney said a recession - two quarters in a row of falling output - was a possible outcome from a vote to leave the EU in the upcoming referendum.

The report warned that Brexit could "materially" hit UK growth and cause the pound to fall "sharply" and inflation to spike, while the economy would suffer as households and businesses reined in spending.

Former chancellor and Vote Leave supporter Lord Lamont said: "The governor should be careful that he doesn't cause a crisis.

"If his unwise words become self-fulfilling, the responsibility will be the governor's and the governor's alone."

But Mr Cameron told reporters at an anti-corruption summit in London that the governor and MPC were "totally independent from government", adding: "Their job is to tell it like it is, to warn of risks in the economy.

"They couldn't be more clear that there is a risk and I think that is a very clear message."

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