The UK's torturous negotiations over the shape and form of Brexit have taken another turn with the Governor of the nation's central bank warning of financial chaos in the event of a no deal Brexit.
Mark Carney, the bank’s Governor, reportedly warned Prime Minister Theresa May and senior ministers housing prices could fall as much as 35% in three years and unemployment reaching double digits under a ‘no deal Brexit’.
The ‘no deal Brexit’ scenario would come about if the deadline for the UK to leave the EU (29 March 2019) comes and goes without any formal agreement being reached between the two sides.
The UK government has been bitterly divided on the details of Brexit with the likes of former Foreign Secretary Boris Johnson and Brexit Secretary David Davis resigning from their posts in disgust at the ‘soft Brexit’ model May adopted at Chequers.
No-deal Brexit could tip UK into recession, warns Moody's https://t.co/5sIMUJhSqi
— The Guardian (@guardian) September 13, 2018
Carney apparently likened the fallout of a no-deal Brexit scenario to the 2008 global financial crisis.
One Cabinet Minister told The Guardian: “The government wouldn’t just stand by” in the event of a no-deal Brexit. “It didn’t in 2008. He wasn’t saying it was all going to happen but I think there is a recognition that you do have to contemplate the worst-case scenario.”
Carney’s warnings came as the UK government released another series of technical notices to inform the public on what will happen to the law on a range of administrative issues such as passports, drivers’ licences, safety standards for consumer goods, roaming charges for mobile phones and firearms restrictions.
Brexit: Carney warns a chaotic Brexit could see house prices plunge https://t.co/WNQrL0Xnkt
— BBC News (UK) (@BBCNews) September 13, 2018
A no-deal Brexit is still considered an unlikely outcome though Carney had previously said the prospect of it happening was “uncomfortably high”.
A spokesperson for the Prime Minister said the government was still confident of achieving consensus on Brexit but was also preparing for a no-deal scenario.
“As a responsible government, we need to plan for every eventuality,” he said. “The cabinet agreed that no-deal remains an unlikely but possible scenario in six months’ time.”
There were also reports that Eurostar trains could stop running in the event of the UK leaving the EU in a ‘blindfold Brexit’, that is a model where some issues around its withdrawal would not be negotiated until after it had left. Similarly, plains from the UK could be barred from landing in France due to uncertainty over which laws applied to them.
Earlier this week, the Bank of England kept interest rates at 0.75% citing “greater uncertainty” around the ongoing Brexit negotiations.