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Carney calls for 'deeper relationship' with Europe | |
(35 minutes later) | |
A "deeper relationship" with Europe will benefit the UK economy, the governor of the Bank of England said. | |
Mark Carney's comments follow claims by chancellor Philip Hammond that the UK and EU economies will only move "very modestly" apart after Brexit. | |
Mr Carey said that while global growth had accelerated, the UK was suffering a "Brexit effect" in the short term. | |
"The economy is doing not as well as we expected it to prior to the referendum," he told the BBC in Davos. | "The economy is doing not as well as we expected it to prior to the referendum," he told the BBC in Davos. |
That meant the UK economy is now 1% smaller than the Bank had predicted before the EU vote. | That meant the UK economy is now 1% smaller than the Bank had predicted before the EU vote. |
"What it works out to is tens of billions of pounds lower economic activity," Mr Carney told Radio 4's Today programme. "Investment has picked up a bit but it hasn't picked up anyways to the same extent as internationally." | |
However, the governor said that as "greater clarity" about the shape of Brexit emerged this year, there would be a "conscious re-coupling" of the UK economy with the global economy. | |
"The deeper the relationship with Europe, the deeper the relationship with the rest of the world... the better it's going to be over time for the UK economy," he added. | "The deeper the relationship with Europe, the deeper the relationship with the rest of the world... the better it's going to be over time for the UK economy," he added. |
Mr Hammond said the EU and UK economies were already "completely interconnected and aligned". | |