Bank of England prepared for wide range of Brexit outcomes: BoE’s Carney

By Padraic Halpin

DUBLIN (Reuters) – The Bank of England and Britain’s largest banks are well prepared for a disorderly Brexit but uncertainty about the economic outlook is holding back pay growth, Bank of England Governor Mark Carney said on Friday.

British media had reported late on Thursday that Carney had warned senior ministers earlier in the day that a chaotic Brexit could lead to house price falls of up to 35 percent over three years as well as spiraling interest rates.

Carney did not address this prospect directly in his speech at Ireland’s central bank, though these projections are similar to scenarios the BoE told banks last year to ensure they had guarded against.

“The Bank of England is well-prepared for whatever path the economy takes, including a wide range of potential Brexit outcomes,” Carney said, sticking close to previous language on preparations for Brexit.

“We have used our stress test to ensure that the largest UK banks can continue to meet the needs of UK households and businesses even through a disorderly Brexit, however unlikely that may be. Our job, after all, is not to hope for the best but to plan for the worst,” he added.

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