Bank Governor Mark Carney was accused of ‘crying wolf’ today after he claimed households are £900 worse off than they would have been without Brexit.
The Bank of England boss said the Britain’s relative slow down compared to other leading economies since 2016 meant people had lost ground.
Foreign Secretary Boris Johnson led the backlash against the Governor, insisting Brexit had not damaged Britain.
While Brexiteer ringleader Jacob Rees-Mogg told MailOnline Mr Carney was ‘crying wolf’.
Britain’s economy has grown in every quarter since the June 2016 poll – allowing Brexiteers to claim it has defied grim pre-referendum forecasts of a recession.
But despite the positive figures, Mr Carney told MPs it meant Britain’s economy was up to 2 per cent smaller than it might have been if the country had not voted to quit the EU in June 2016.
Despite his downcast analysis Mr Carney admitted there was likely to be a post-Brexit boom in business investment once the terms of exit were clear.
Foreign Secretary Boris Johnson (pictured today in Argentina) led the backlash against the Governor, insisting Brexit had not damaged Britain
Mr Johnson launched his attack on Mr Carney’s downbeat analysis during a press conference in Argentina with foreign minister Jorge Faurie (pictured)
Tory MP Jacob Rees-Mogg (pictured today in Westminster) slammed the latest gloomy intervention from Bank of England governor Mark Carney
Households are £900 a year worse off than they would have been without Brexit, Bank Governor Mark Carney (pictured today at the Treasury committee) claimed today
Speaking in Argentina today Mr Johnson said: ‘I believe the Chancellor of the Exchequer has given an authoritative opinion on this matter, which is that it is absolutely not the case that Brexit has damaged the interests of this country.
Mr Rees-Mogg told MailOnline said: ‘The Governor of the Bank of England cannot even get his forward guidance on interest rates right which is his main responsibility so his endless crying wolf over Brexit simply discredits him and sadly the Bank.’
The Governor said that the UK’s economy is ‘up to two per cent lower than it would have been’ without the Brexit vote, adding: ‘That is a reasonable difference.’
Mr Carney told the MPs: ‘If you map that into household incomes… Real household incomes are about £900 lower than we forecast in May 2016, which is a lot of money.’
He said this was despite global and European economies being ‘much, much stronger’ than they were when the Bank made its economic predictions ahead of the 2016 referendum.
And Mr Carney said pre-referendum growth was not maintained despite a ‘very large stimulus provided by the Bank of England’.
Mr Carney told MPs it was because Britain’s economy was up to 2 per cent smaller than it might have been if the country had not voted to quit the EU in June 2016. Pictured is how the size of the economy has changed since 2004
Asked if the Prime Minister agreed with Mr Carney’s assessment that Britons were worse off after the referendum, a Downing Street spokesman said: ‘I would point you to the fact that the economy has remained incredibly resilient continuing to grow over the past five years.
‘Growth has been stronger than many expected after the referendum and in recent weeks we have seen the lowest net borrowing in over a decade, employment up to a new record high, unemployment at this lowest since 1975, real wages growing, 69,000 first-time buyers benefiting from our stamp duty cut and UK exports rising by nearly 10 per cent in the last year to a new record high.’
In another Brexit intervention, Mr Carney predicted a surge in invesment once Brexit has taken place.
He told the committee: ‘Actually, with clarity, that ultimately comes, big long-term decisions that are taken about the relationships with Europe, that business will then use those clean balance sheets, access financing, and start to put capital to work, and then we’d see a sharp pick up in business investment.’
Treasury Select Committee chairwoman Nicky Morgan (pictured at today’s hearing) asked the Bank chief whether he accepted that statements referring to a ‘somewhat earlier-than-expected’ interest rate rise was ‘rather confusing’, given that rates were ultimately kept steady at 0.5%
Treasury Select Committee chairwoman Nicky Morgan asked the Bank chief whether he accepted that statements referring to a ‘somewhat earlier-than-expected’ interest rate rise was ‘rather confusing’, given that rates were ultimately kept steady at 0.5%.
Mr Carney said a hike was never set in stone.
He said: ‘We give guidance. The guidance is conditional on the economic outlook.
‘If the outlook changes, the actual policy stance will adjust, and of course the policy stance is determined by the sum of the individual decisions,’ he told MPs during a Treasury Select Committee hearing on Tuesday.
‘What happened was the economy did not in the first quarter evolve broadly in line with our forecast,’ he added.
‘Inflation came in lower, economic momentum – a number signs – were lower, and then ultimately the hard data came in lower as well and we as a committee sat back, looked back at that data and took our own assessments.’
While two members of the Monetary Policy Committee (MPC) voted in favour of an interest rate rise, Mr Carney said the majority ‘thought it made sense to take a bit of time to see that the momentum that I expect – that we expect, as a committee, in our forecasts – the momentum in the economy to re-establish itself before raising interest rates’.
The Governor has been dubbed the ‘unreliable boyfriend’ by critics, who say he has failed to follow through on monetary policy guidance on multiple occasions.