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Need for Brexit transition seen in UK and Europe - Carney
November 16, 2017 / 7:41 AM / a month ago

Need for Brexit transition seen in UK and Europe - Carney

LONDON (Reuters) - Bank of England Governor Mark Carney said on Thursday there was a broad understanding in Britain and in Europe of the importance of reaching a transition deal for Brexit and a good trade and investment deal after that.

Mark Carney, the governor of the Bank of England, delivers the Bank's quarterly Inflation Report, at the Bank of England, in the City of London, Britain November 2, 2017.REUTERS/Stefan Rousseau/Pool

“The government recognises, parliamentarians, businesses, people across the country, people in Europe recognise as well that it is in everyone’s interest to have at a minimum a transition period to the new relationship,” Carney said in an interview with ITV television.

He said there was also recognition of the need for “as comprehensive and open a trading and investment partnership between the UK and the EU 27 at the end of that transition.”

Carney has long argued that a transition deal would help smooth Britain’s exit from the EU and reduce the risk of a shock when the world’s fifth-biggest economy leaves the bloc in March 2019.

Slow progress in the talks with the EU has unsettled many businesses who are warning that unless a transition is agreed soon, some may begin activating Brexit contingency plans - which may include moving out of Britain.

Carney told ITV that the BoE would “do whatever we can to support the economy during the transition, whatever form of deal is struck, whether there is no deal or a very comprehensive deal.”

Earlier this month, the BoE raised interest rates for the first time in more than 10 years, saying it expected the recent sharp fall in unemployment to soon add to pressure on inflation. Britain’s exit from the EU could also be inflationary if fewer workers come to the country and companies invest less, it said.

Reporting by Kate Holton; Writing by William Schomberg and Toby Chopra

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