More 'Project Fear': BoE's Carney Says Risk Of Calamitous 'No Deal' Brexit Is "Alarmingly High"

As MPs battled to pass a business motion on the Letwin-Cooper bill to try and force Theresa May to request a lengthy Article 50 extension to try and avert a 'no deal' Brexit on April 12, BoE Governor Mark Carney took to Sky News to deliver his latest salvo in the central bank's efforts to stoke hysteria surrounding the prospect of the UK crashing out of the EU.

Before revealing that he would "absolutely not" be staying in his role at the central bank past 2020 due to Brexit-related stress, Carney told Sky News that the risk of a no-deal Brexit is "alarmingly high" (even after Jeremy Corbyn said talks with the PM on a potential Brexit deal alternative were making progress), and that Tory demands for a "managed" no-deal Brexit were "absolute nonsense."

He also defended the central bank's gloomy forecasts for a 'no deal' scenario (as a reminder, Carney and the central bank's staff said 'no deal' would lead to an economic crisis in the UK that would be "worse than 2008"), and denied that he was guilty of fearmongering. After all, the central bank didn't simply butt in without reason: a committee of MPs had requested that the bank conduct an analysis, and hundreds of staffers at the central bank participated in the project, including its staff economists.

Carney

Despite "real progress" in Brexit preparations, a Brexit induced economic shock remained his base case (and as the New York Times pointed out earlier this week, for many British businesses, Brexit has effectively already happened).

Back in August, the risk of no-deal felt "uncomfortably high," Carney said. Unfortunately, Carney's fears about an insurmountable impasse have proven well-founded and the risk of 'no deal' is now "alarmingly high."

"Unfortunately I think it proved accurate," he said. And despite Parliament's expressed will that the UK do something - anything - to avert 'no deal', it remains the default option.

"It's alarmingly high now. We're in a situation where the expressed will of parliament is for some form of deal, so to put it in the double negative: parliament is against no deal. The government, as expressed by the prime minister, is against no deal, the European Union is against no deal, and yet it is a possibility - it is the default option."

He added that 'no deal' could happen suddenly - or even by accident - and there would be no transition, guaranteeing that the process would be "disorderly."

"So no-deal would happen by accident, it would happen suddenly, there would be no transition - it is an accidental disorderly Brexit."

However, Carney stood by his assertion that bank balance sheets in the UK were strong enough to withstand any Brexit-related pressures - though that doesn't necessarily mean financial markets wont' be impacted.

"There are lots of things to worry about in the event of a no-deal Brexit but the financial sector is not one of them."

He added that without time to prepare for new customs regimes, business output from the UK would almost certainly take a hit.

Meanwhile, as Parliament scrambles to figure out exactly how it wants to move forward on Brexit, one Twitter user highlighted a humorous observation that is almost uncannily apt.