Bank of England ‘reluctant’ to talk about Brexit harm, says Bank of America

Bank of England governor Andrew Bailey faced a Brexit row on Friday after it was accused of being “reluctant” to talk about the harm caused by Britain quitting the EU to avoid upsetting the Government.

This issue was highlighted by the Bank of America’s London office in its “UK Economic Viewpoint”.

It said: “We would note our impressions that the BoE has been reluctant to talk recently about one of the key supply shocks hitting the UK, Brexit.

“It was notable, for instance, during Governor Bailey’s interview with Adam Posen on the fringes of the IMF Spring Meetings. Or that the recent MPR (Monetary Policy Report) contains in our view little reference to the issue.”

The Bank of England declined to comment on the claim.

However, Liberal Democrat international trade spokeswoman Sarah Olney, MP for Richmond Park, insisted that the damage caused by Brexit was clearly evident and should be highlighted.

“We’re seeing goods getting backed up in ports, businesses swamped with red tape and trade falling,” she said.

“People up and down the country can see this first-hand and the Bank of England should be reporting on this, not muting their comments to appease the Government.”

The BoE does mention Brexit in some of its documents and speeches.

The independent Office for Budget Responsibility believes the new trading relationship between the UK and EU, as set out in the Brexit deal, will reduce long-run productivity by four per cent relative to remaining in the EU.

The OBR estimates that both exports and imports will be around 15 per cent lower in the long run than if the UK had stayed in the EU.

Mr Bailey is already under pressure over the bank not forecasting earlier that inflation was set to sky-rocket to nine per cent already and may go into double digits later this year.

He also faced controversy after giving an “apocalyptic” warning about the threat of widespread food shortages caused by Vladimir Putin’s invasion of Ukraine and blockade of its ports.

Ukraine is a major exporter of grain and other staple food products.

MPs accused him of being too alarmist.

However, world food chiefs have warned millions of people could die unless Odesa and other ports in Ukraine are opened up for exports within weeks.