No-deal Brexit could send food prices soaring, Bank of England warns

Bank of England Governor Mark Carney has said the price of food could go up by 10% if Britain left the EU with no deal

Bank of England Governor Mark Carney has said the price of food could go up by 10% if Britain left the EU with no deal

In the most extreme no-deal scenario, he said shopping bills could rise by up to 10%, but even in an orderly no-deal withdrawal, with a transition period, he said grocery prices could rise by 6%.

The main takeaway should be that the BOE found that United Kingdom banks could withstand any outcome, he said, adding there is a low probability of the worst-case Brexit scenario materializing.Responding to criticism of the publication, Carney said that's an "unfair" attack. "We didn't just stay up all night and write a letter to the Treasury Committee", Carney told lawmakers at a hearing in parliament.

But he told lawmakers that the price of food could go up by 10% if Britain left the European Union with no deal and no mitigating arrangements to avoid chaos at the country's ports.

The Bank had already warned last week that a disorderly Brexit could push the United Kingdom towards the biggest slump in modern memory, with the economy shrinking by 8%, house prices crashing 30%, unemployment almost doubling and inflation spiralling to 6.5%.

Mr Carney said they had put a lot of work into the assessments: "There's no exam crisis".

Former Bank of England Governor Mervyn King
Former Bank of England Governor Mervyn King

Mr Carney was asked by MPs to describe some of the ways in which this might affect ordinary consumers.

Mark Carney stressed the worst-case scenarios were "low-probability events in the context of Brexit" which the central bank needed to consider to make sure Britain's banking system could withstand any Brexit shocks. "You asked for something that we had and we brought it and gave it to you", he said.

He said: "What Rees-Mogg did was contemptuous of parliament, in suggesting that you weren't being straightforward with this committee".

"We would not be comfortable...outsourcing supervision of this incredibly complex, incredibly important financial sector", he said.

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