LONDON (REUTERS) 

  Still the debates about Theresa May Brexit's  plan is under hell, as number of criticism to it from many the parliament figures expressed their worries.Yesterday The Head of Bank of England (BOE) Mark Carney  said that Britain risks will cause suffering more even bigger hit to its economy than during the global financial crisis 10 years ago if it leaves the European Union in a worst-case Brexit scenario in four months' time.

Hours after the government issued its own stark warning about a no-deal Brexit, the BoE said the economy could shrink by as much as 8 per cent in about a year.

The two reports could add to pressure on lawmakers to drop their opposition to the Brexit agreement that Prime Minister Theresa May struck with other EU leaders on Sunday (Nov 25), which is far from certain to be approved in Parliament on Dec 11.

However, supporters of a more definitive break with Brussels quickly dismissed the reports as scaremongering, while advocates of closer ties said the forecasts demonstrated that promises of greater prosperity outside the EU had been a lie.

The BoE said the "disorderly" scenario - involving severe delays at British borders and financial markets' loss of confidence in British institutions - was not its base case.

But if it happened, there would be a 25 per cent tumble in the value of the sterling - taking it close to parity against the dollar - a spike in inflation to 6.5 per cent from around 2.4 per cent now, and a jump in interest rates. House prices would fall by 30 per cent.

The sterling gave up earlier gains as the BoE outlined its various scenarios.

It said a merely "disruptive" Brexit, with goods flowing across borders but facing tariffs and other barriers, would cause a 3 per cent fall in gross domestic product.

"Our job is not to hope for the best but to prepare for the worst," BoE governor Mark Carney told a news conference, noting that Britain's banks could cope with the worst Brexit shock.

A deal that keeps Britain and the EU in a close future relationship could lead to faster economic growth than what the BoE pencilled in earlier this month, the central bank said.

But all of the BoE's scenarios assumed interest rates will rise. In the worst-case Brexit, rates could rise to 5.5 per cent - a level last seen in 2007, before the financial crisis - from the current base rate of 0.75 per cent.

 

Rate this item
(0 votes)

About us

 Castle Journal is an international newspaper with daily electronic edition, received the international license by the United Kingdom number 10675, and accredited by the Egyptian Embassy in London, owned by Abeer Almadawy

Castle Journal expresses on the free and human voice specialized in the diplomatic, cultural and scientific media, it is eager to create a close relationship with the readers, who is our priority and considers them a true partner.

Castle Journal holds all the permits for practicing its duties of journalism in all countries of the world and the international organizations