Mark Carney, the governor of the Bank of England, has warned that Brexit will harm the UK economy and hurt people’s finances.
On Friday, during an interview on a radio programme, the Bank of England governor stated that households could experience a “short-term damage” to their finances “over the course of the next 2 to 3 years, whilst it’s not yet clear what the final arrangements [for Brexit] are.”
The response of Carney hinted uncertainty regarding the UK’s potential for growth, amid stuttering negotiations between the European Union and the United Kingdom.
He also suggested a “gradual” increase in interest rates in the “relatively near term.” However, he remained tight-lipped on the specific time-frame.
“We can see that in the coming months if the economy continues on this track, it may be appropriate to raise interest rates,” said Carney.
Notwithstanding Labour leader Jeremy Corbyn’s attack on the United Kingdom’s “failed model of capitalism,” Carney defended the role that the Bank of England played in society, suggesting that their focus is primarily on financial stability.
“The gap between rich and poor: these are issues for Government, not the Bank of England,” said the ECB governor.
“The poorest without question are hurt when banks go down; our job is to make sure the taxpayer doesn’t have to bail out someone in the city. Society has to decide how to distribute the gains of growth, not the Bank of England.”
Carney also stated that the “speed limit” of the economy has delayed because of Brexit.
Carney also said that productivity has been flat since businesses have been put off from investing because of the uncertainty surrounding the United Kingdom’s withdrawal from the union.
He also steered focus to positive figures for the economy, particularly regarding unemployment, which is currently at its lowest level since the 1970s.
Former Labour MP Ed Balls, speaking ahead of Mr Carney on the Today programme, stated that the Conservative Party has already “washed its hands” of responsibility for financial stability and left everything to the Bank of England.
Balls stated that the current Bank governor was “doing a brilliant job.” However, he said that more responsibility should be given to the Chancellor.