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Bank of England governor denies being politically biased over Brexit - live updates | |
(35 minutes later) | |
11.03am BST | |
11:03 | |
Rachel Reeves then questions Mark Carney about the implications of Britain leaving the EU. | |
Mark Carney agrees that Brexit could cause the pound to weaken, creating an upside shock to inflation that would make it harder to keep interest rates low. | |
If Britain stays in the EU, the next move in interest rates is probably up. If the public vote to leave, there’s less chance of a rate rise. | |
Deputy governor Ben Broadbent then points out that the UK economy appears to have slowed quite sharply this year - it’s unclear how much of this is due to Brexit fears. | |
10.58am BST | |
10:58 | |
Committee chairman Andrew Tyrie steps in -- perhaps worried that Mark Carney and Jacob Rees-Mogg might take their argument outside. | |
He tells the BoE governor that many members of the commitee would have been concerned if the Bank had NOT discussed the EU referendum. | |
Labour MP Rachel Reeves than puts the boot into Rees-Mogg, saying: | |
If anyone’s reputation has been damaged by today’s performance, it’s not the Bank of England. | |
Carney be like pic.twitter.com/Oft0ElUXbL | |
Carney 3 Rees-Mogg 0 | |
Updated | |
at 11.00am BST | |
10.50am BST | |
10:50 | |
Carney accused of 'political involvement' over Brexit. | |
Jacob Rees-Mogg MP now accuses Carney of being influenced by chancellor George Osborne. | |
As the gloves come off, Carney insists that he’s not being played by government. | |
There’s “no possibility of undue influence from the Treasury”, Carney insists. It wouldn’t work anyway, even if they tried | |
Rees-Mogg repeatedly trying to establish HMT influence over the Bank of England. "There is no possibility of undue influence", says Carney. | |
Q: So it’s terribly convenient that you’re taking exactly the same position as the Treasury? | |
I don’t accept that at all. | |
Q: But you have a duty to remain apolitical. How can anyone trust you on interest rates now? | |
Our comments might not please you, Carney shoots back, but it has improved the chances of the economy recovering from the Brexit undertainty. | |
To suggest otherwise is to try to undermine it. | |
Rees Mogg insists that Carney has become politically involved... | |
I don’t think it’s worth replying to, says Carney, trying to swat the pro-Brexit MP aside. | |
Rees-Mogg leaves Carney speechless after accusing him of getting "politically involved". "I don't think that's worth replying to" #euref | |
10.44am BST | |
10:44 | |
Q: What contact have you had with George Osborne about the referendum? | |
Mark Carney says he has had a series of conversations around how membership of the EU allows the bank to achieve its monetary targets. | |
Ultimately we can achieve the inflation target whether we’re in the EU or not. | |
And there have also been conversations about the impact of Brexit on financial stability, and on the mechanics of potentially exiting the EU, Carney says. | |
Q: How would any directions from the government come? | |
I’d expect it in writing, and in public, Carney says - he wouldn’t accept ‘informal direction’. | |
10.39am BST | |
10:39 | |
Mark Carney warns that sterling has been hit since November by the single issue of whether Britain stays in the EU, or leaves. | |
That’s why the Bank was right to flag up that the referendum could change monetary policy, he argues. | |
Rees-Mogg isn’t impressed: pointing out that a Labour government in his lifetime proposed re-introducing capital controls. Yet the Bank wouldn’t give a view on a general election - but here it is, wading into the referendum issue. | |
Your comparison is essentially false, he tells Carney. | |
10.35am BST | |
10:35 | |
Now Jacob Rees-Mogg MP, a pro-Brexit MP, takes the microphone. | |
Q: In general elections, you don’t give a view on opposition policies, so why is the Bank giving its view on Brexit? | |
Carney explains that the EU referendum is a single event that creates a ‘discrete risk’ to monetary policy, while a general election does not, as policies are implemented over time. | |
Q: But a change of government is a discrete event, Rees-Mogg gently insists. You get a new economic policy and a new chancellor. | |
Carney argue that it’s still not a single event whose impact can be clearly identified. | |
10.23am BST | 10.23am BST |
10:23 | 10:23 |
Carney in Treasury committee: no member of the MPC or FPC disagrees with their collective assessment of likely Brexit impact - 20 people | Carney in Treasury committee: no member of the MPC or FPC disagrees with their collective assessment of likely Brexit impact - 20 people |
10.22am BST | 10.22am BST |
10:22 | 10:22 |
Bank of England united over Brexit recession fears | Bank of England united over Brexit recession fears |
The Treasury committee now turns to other top officials from the Bank of England. | The Treasury committee now turns to other top officials from the Bank of England. |
First Martin Weale, who sits on the monetary policy committee which sets interest rates. He says Brexit would probably have a materially negative impact on growth and inflation, in the short term. | First Martin Weale, who sits on the monetary policy committee which sets interest rates. He says Brexit would probably have a materially negative impact on growth and inflation, in the short term. |
And that would increase the risk of recession, Weale adds. | And that would increase the risk of recession, Weale adds. |
Dr Gertjan Vleighe, another independent MPC member agrees. | Dr Gertjan Vleighe, another independent MPC member agrees. |
It is likely that there would be a material slowing in growth, inflation would rise, the exchange rate would fall, if Britain votes to leave the EU, Vleighe explains. | It is likely that there would be a material slowing in growth, inflation would rise, the exchange rate would fall, if Britain votes to leave the EU, Vleighe explains. |
Ben Broadband, deputy governor, says he agrees too. | Ben Broadband, deputy governor, says he agrees too. |
Q: So is there anyone on the MPC who disagrees? | Q: So is there anyone on the MPC who disagrees? |
Governor Mark Carney says there isn’t - the Committee is united on this one. | Governor Mark Carney says there isn’t - the Committee is united on this one. |
Q: How about the Financial Policy Committee? (responsible for financial stability). | Q: How about the Financial Policy Committee? (responsible for financial stability). |
Carney says they are also concerned about the referendum: | Carney says they are also concerned about the referendum: |
It is the consensus view of the FPC that Brexit represents the biggest domestic risk to financial stability. | It is the consensus view of the FPC that Brexit represents the biggest domestic risk to financial stability. |
Q: And there are no dissenters on the FPC either? | Q: And there are no dissenters on the FPC either? |
No, Carney replies. | No, Carney replies. |
Updated | Updated |
at 10.23am BST | at 10.23am BST |
10.16am BST | 10.16am BST |
10:16 | 10:16 |
The key points so far: | The key points so far: |
Tyrie: Do you think it's a good idea for the IMF to come over week before the #EURef & jump in with both feet? Carney: I think it's a detail | Tyrie: Do you think it's a good idea for the IMF to come over week before the #EURef & jump in with both feet? Carney: I think it's a detail |
To MPs Carney won't rule out further interventions in Brexit debate, but says the broad issues have been set out | To MPs Carney won't rule out further interventions in Brexit debate, but says the broad issues have been set out |
10.15am BST | 10.15am BST |
10:15 | 10:15 |
Next question for Mr Carney.... | Next question for Mr Carney.... |
Q: Is it acceptable for the International Monetary Fund to turn up a week before the EU referendum and give its views? [explainer: the Fund is due to publish its full health check on the UK, including in-depth calculations on the ‘Brexit’ effect, next month] | Q: Is it acceptable for the International Monetary Fund to turn up a week before the EU referendum and give its views? [explainer: the Fund is due to publish its full health check on the UK, including in-depth calculations on the ‘Brexit’ effect, next month] |
Quite frankly, I have no influence over the IMF, says Carney. | Quite frankly, I have no influence over the IMF, says Carney. |
Q: But is it acceptable? | Q: But is it acceptable? |
The thrust of the IMF’s views on this issues is well known, Carney argues | The thrust of the IMF’s views on this issues is well known, Carney argues |
Q: But is it a good idea for the IMF to ‘jump in’ with both feet, at such a crucial political time? | Q: But is it a good idea for the IMF to ‘jump in’ with both feet, at such a crucial political time? |
Carney says he’s only expecting to get “detail” from the IMF about the UK economy next month.... | Carney says he’s only expecting to get “detail” from the IMF about the UK economy next month.... |
10.11am BST | 10.11am BST |
10:11 | 10:11 |
Carney defends Bank's Brexit warning | Carney defends Bank's Brexit warning |
Mark Carney begins his hearing by defending the Bank of England’s warning that Britain could plunge into recession if it leaves the EU. | Mark Carney begins his hearing by defending the Bank of England’s warning that Britain could plunge into recession if it leaves the EU. |
Asked what principles and guidelines are being used for such forecasts, the governor says the Bank has adopted “substantially the same rules as the UK civil service”. | Asked what principles and guidelines are being used for such forecasts, the governor says the Bank has adopted “substantially the same rules as the UK civil service”. |
But there’s one big difference - civil servants support a minister, while the Bank is independent and doesn’t support government policy. | But there’s one big difference - civil servants support a minister, while the Bank is independent and doesn’t support government policy. |
And the Bank will soon go into purdah, to prevent any officials saying anything controversial in the run-up to the June 23 referendum. | And the Bank will soon go into purdah, to prevent any officials saying anything controversial in the run-up to the June 23 referendum. |
However, the Bank will be setting UK interest rates on 16 June, and will release the minutes of its meeting on that day | However, the Bank will be setting UK interest rates on 16 June, and will release the minutes of its meeting on that day |
Q: So we can’t exclude the possibility of anoher intervention in the Brexit debate, asks chairman Andrew Tyrie.... | Q: So we can’t exclude the possibility of anoher intervention in the Brexit debate, asks chairman Andrew Tyrie.... |
It can’t be excluded, Carney agrees. But in his judgement, the Bank has already highlighted the main issues. So he doesn’t expect to say anything new on the 16th. | It can’t be excluded, Carney agrees. But in his judgement, the Bank has already highlighted the main issues. So he doesn’t expect to say anything new on the 16th. |
There is a lot of uncertainty in the economy at the moment, so the Bank could be over-or-under-estimating the strength of the economy, Carney concludes. | There is a lot of uncertainty in the economy at the moment, so the Bank could be over-or-under-estimating the strength of the economy, Carney concludes. |
10.02am BST | 10.02am BST |
10:02 | 10:02 |
Bank of England governor Mark Carney is appearing before parliament’s Treasury committee to answer questions about the UK economy, and his warnings against Brexit. | Bank of England governor Mark Carney is appearing before parliament’s Treasury committee to answer questions about the UK economy, and his warnings against Brexit. |
Here’s a livefeed. | Here’s a livefeed. |
10.01am BST | 10.01am BST |
10:01 | 10:01 |
Britain’s failure to hit its borrowing targets last year are a blow to chancellor George Osboene, as he tries to rally the country to remain in the EU. | Britain’s failure to hit its borrowing targets last year are a blow to chancellor George Osboene, as he tries to rally the country to remain in the EU. |
Howard Archer of IHS Global Insight says: | Howard Archer of IHS Global Insight says: |
The upwardly revised shortfall for 2015/16 leaves the Chancellor open to criticism that he clearly missed the 2015/16 public finances targets that were set out as recently as March’s budget – and could well be used by supporters of the UK leaving the EU as evidence that the Treasury’s forecasts are unreliable (although the public finance forecasts are actually done by the Office for Budget Responsibility). | The upwardly revised shortfall for 2015/16 leaves the Chancellor open to criticism that he clearly missed the 2015/16 public finances targets that were set out as recently as March’s budget – and could well be used by supporters of the UK leaving the EU as evidence that the Treasury’s forecasts are unreliable (although the public finance forecasts are actually done by the Office for Budget Responsibility). |