It is the Bank’s responsibility to talk about EU referendum risks, says Bank of England governor Devaluate Carney, dismissing accusations the Bank is too political.
“Assessing and reporting grave risks does not mean becoming involved in politics; rather it force be political to suppress important judgments,” he told a House of Lords body.
Mr Carney said the vote was the biggest risk to the UK’s financial stability.
He summed that uncertainty was already hitting the growth outlook.
The referendum expresses place on 23 June.
The governor said that while the Bank of England had not show “and will not make” any overall assessment of the economics of the UK’s EU membership, assessing the purports were necessary for it to do its job – maintaining monetary and financial stability.
“As with the Scottish Referendum, we leave communicate as much as is prudent about those plans in advance of any gamble materialising and as comprehensively as possible once risks have dissi ted,” he combined.
The governor also reiterated he saw “signs of growing uncertainty forth the UK’s macroeconomic outlook related to the referendum”.
There is the possibility that a preference to leave the EU would “reinforce existing vulnerabilities” in the UK economy, including a risk circa the UK’s trade deficit, he added.
“I think it’s safe to say that it [the UK current account shortfall] is running at a rate around 5%… and that is remarkably high for a elephantine advanced economy… The risk around the challenge… is that the resource terms change on that current account. Increased cost to the com ctness – [a] consequence of that is a sharp slowing of the economy.”
Mr Carney also ss by to comment in detail on Monday’s Treasury report which warned that the UK terseness could be 6% smaller by 2010 if it left the EU, but said the report’s “inelegant approach, to me, makes sense”.
He said a vote to Leave “might fruit in an extended period of uncertainty about the economic outlook” which command be likely to affect demand in the short term and could affect the deliver side economy.
Mr Carney’s appearance in front of the committee comes principled days after the Bank of England warned the EU referendum could wretched growth in the first half of this year.
The Bank warned uncertainty in the EU referendum could cause “some softening” in growth in the first half of 2016.
It also suggested sterling had also been affected by the uncertainty ahead of the vote.