Project Fear U-TURN? Bank of England Governor says UK economy 'WILL BE FINE' after Brexit
BANK OF ENGLAND Governor Mark Carney appeared to have an unexpected change of mind when he said the UK Government should not be concerned about the impact Brexit could have on the British financial sector.
BoE Governor says UK financial sector will be FINE after Brexit
Mr Carney was an integral part of former Chancellor George Osborne's attempts to thwart the Brexit vote – known as Project Fear.
In November, the Bank raised core interest rates from 0.25 percent to 0.5 percent because of the "noticeable impact on the economic outlook".
But the Governor appeared to have a change of heart when he reassured the Government would not have to worry about Brexit's impact on the financial sector.
He said: "The Government doesn’t have to worry about the impact on the financial sector because it will be able to withstand and support the economy.
"From the Bank of England’s perspective what is necessary and what we’ve been doing is to make sure we are in a position in the UK, with its huge financial sector, that we can withstand any outcome and we can take advantage of any outcome."
Former Prime Minister David Cameron also recently came out claiming Brexit was "a mistake, but not a disaster".
Mr Carney said the Bank's work helping the financial sector prepare for Brexit is a "crucial basis" for the negotiations with the European Union.
Speaking to BBC Radio 4's Today programme, Mr Carney continued: "We have put the banks in position. That’s providing a crucial base, it’s what the people of the United Kingdom should expect from us and it’s what we’ve done.
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The Government doesn’t have to worry about the impact on the financial sector
"It provides a crucial base for the Government in the negotiations."
It comes after think tank The UK in a Changing Europe published its latest research results revealing Brexit would have "negligible" effects on the British financial sector.
The report said that financial services have a "low dependence" on European Union markets thanks to the global ties financial businesses have.
Professor Raquel Ortega-Argilés said: "The results suggest that while financial and manufacturing services are very important, the UK Government’s emphasis on securing special UK-EU agreements for City-based financial markets may be misplaced.
"Emphasis should be placed on helping the other much more exposed sectors which do not have strong lobbying power."