Conservative MP’s claim that BOE is against Brexit is ‘entirely unfounded’, says Mark Carney
The Bank of England has become embroiled in the increasingly bitter EU referendum debate after its governor was forced to fend off accusations that Threadneedle Street was being too supportive of the government’s pro-EU line.
Mark Carney described as “entirely unfounded” the suggestion from the pro-Brexit Conservative MP Jacob Rees-Mogg that the Bank was being politically partisan and jeopardising its reputation for “Olympian detachment” by emphasising the pros but not the cons of EU membership.
Giving evidence to MPs on the Treasury select committee, the governor provided backing for David Cameron by warning that there would be short-term costs to the UK from a decision to leave the EU in June – including weaker investment, lower consumer spending and the relocation of foreign-owned banks to Ireland or continental Europe.
Carney said the deal negotiated by Cameron last month had addressed the issues identified by the Bank as necessary to ensure the UK’s monetary and financial stability.
However, Carney had to fend off an attack from Rees-Mogg, who said it was “beneath the dignity” of the governor to be making “speculative” comments about the beneficial impact of EU membership.
The governor responded testily when asked by another Conservative Brexit supporter, Steve Baker, whether the Bank had been put under any pressure by Downing Street to come up with a pro-EU assessment.
Carney said his only conversations with the prime minister and the chancellor, George Osborne, had been about the specific issues that affected the Bank’s twin aims of controlling inflation and ensuring financial stability.
“I am expressing the views of the Bank,” he added. “We weren’t leant on by anybody.”
The governor said Threadneedle Street took its independence “very seriously” and said there would have been considerable pushback had the government sought to influence its views.
Carney said the Bank wanted to keep out of the political battle over Europe and would not be providing a full assessment of the economic advantages and disadvantages of membership.
