A “disorderly” Brexit could cause a “wide range of UK macroeconomic risks” such as a massive fall in the value of the pound, the Bank of England revealed today.
In its stress test for British banks, the Bank modelled a 4.7 per cent fall in output, a 27 per cent devaluation of the pound against the dollar, and house prices devaluing by a third. All big UK lenders emerged from the test with the strength to continue operating.
Mark Carney, the Governor of the Bank of England, warned that if the UK did leave in a “sharp, disorderly” way there would be some economic “pain” for households and businesses.
Commenting, Wes Streeting MP, leading supporter of Open Britain and member of the House of Commons Treasury Select Committee, said:
“While it is encouraging that UK banks are showing greater resilience, this stress test showcased the appalling impact on our economy a destructive no-deal Brexit would have.
“They modelled a massive fall in our economic output, an unprecedented collapse in the value of the pound, and a severe house price crash. It’s clear the Bank of England believes this to be a realistic scenario if we leave the European Union without an agreement.
“This is a nightmare scenario that would leave working people worse off and which no-one voted for. As we get closer to the looming Brexit cliff edge, voters have the right to keep an open mind about whether this is really the right future for our country.”
Notes to editors:
The stress test is reported here: https://www.bloomberg.com/news/articles/2017-11-28/boe-says-stress-test-shows-banks-can-withstand-disorderly-brexit-jajbt2f0?cmpid=BBBXT112817_BIZ&utm_medium=email&utm_source=newsletter&utm_term=171128&utm_campaign=brexit