The UK economy would be ‘booming’ if it wasn’t for Brexit, says Mark Carney

Ross McGuinness

The UK economy would be booming if it wasn’t for Brexit, according to Mark Carney.

The governor of the Bank of England said British businesses are still waiting for the results of negotiations with the EU before making big investments.

He said such delays were slowing down the UK’s economic growth.

Mark Carney was talking to Robert Peston (Picture: Rex)
Mark Carney was talking to Robert Peston (Picture: Rex)

Mr Carney told ITV’s Peston on Sunday programme that Bank of England forecasts for foreign investment in the UK were 20% lower than estimated in the month before the EU referendum last June.

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‘Since the referendum, what we’re seeing is that business investment has picked up,’ said Mr Carney.

‘But it hasn’t picked up to any of the extent that one would have expected given how strong the world is, how easy financial conditions are, how high profitability is and how little spare capacity they have.’

He said the UK economy is currently strong, but added: ‘It should really be booming, but it’s just growing.

‘I think we know why that’s the case, because they’re waiting to see the nature of the deal with the European Union.

‘It’s the most important investment destination and [businesses] need to know transition and end state, everybody knows this, the government knows it and is working on it, UK businesses know it and the Europeans know it.’

Mr Carney said the UK is doing well, but could be 'booming' (Picture: Rex)
Mr Carney said the UK is doing well, but could be ‘booming’ (Picture: Rex)

When asked if prime minister Theresa May walked away from the table without a Brexit deal, Mr Carney replied: ‘In the short term, without question, if we have materially less access (to the EU’s single market) than we have now, this economy is going to need to reorient and during that period of time it will weigh on growth.’

If there is a poor Brexit deal, he said the Bank of England would not be able to cut interest rates in future.

He was speaking just days after the Bank of England raised interest rates of the first time in ten years.