Mark Carney has warned that Brexit will hurt the UK economy and damage people’s finances.
During an interview on BBC Radio 4’s Today Programme on Friday, the Bank of England governor said households could see “short-term damage” to their finances “over the course of the next 2 to 3 years whilst it’s not yet clear what the final arrangements [for Brexit] are”.
The Bank of England governor’s response suggested uncertainty about the UK’s potential for growth amid stuttering negotiations between the UK and the European Union.
Mr Carney also hinted at a “gradual” rise in interest rates in the “relatively near term”, but remained tight-lipped on the exact time-frame.
“We can see that in the coming months if the economy continues on this track, it may be appropriate to raise interest rates”, he said.
Mr Carney also defended the role Bank of England played in society in light of Labour leader Jeremy Corbyn’s attack on the UK’s ‘failed model of capitalism’, suggesting it’s focus was primarily on financial stability.
“The gap between rich and poor, these are issues for government, not the bank of England,” he said.
“The poorest without question are hurt when banks go down; our job is the taxpayer doesn’t have to bail out someone in the city. Society has to decide how to distribute the gains of growth, not the Bank of England”.
Mr Carney also said that the “speed limit” of the economy has slowed because of Brexit.
Productivity has been flat because of businesses have been put off from investing due to the uncertainty surrounding the UK’s departure from the union, Mr Carney said.
He also pointed to positive figures for the UK economy, particularly unemployment, which is at its lowest level since the 1970s.
Speaking ahead of Mr Carney on the Today Programme, former Labour MP Ed Balls said that the Conservative Party has "washed its hands" of responsibility financial stability and left it all to the Bank of England.
Mr Balls said the current governor was "doing a brilliant job" but said more responsibility should be handed to the chancellor.
