The Governor of the Bank of England (BoE) Mark Carney yesterday told the Cabinet that the impacts of a ‘no deal’ Brexit scenario on the UK economy could include a fall in house prices of 35 percent over three years and a fall in the British pound, as well as a rise in interest rates, inflation and unemployment. He also reportedly warned that the BoE would not be able to support the economy by cutting interest rates as it did in the aftermath of the Brexit referendum in 2016. However, Carney said that if the UK and the EU agreed a Withdrawal Agreement based on the Government’s Chequers proposal, the economy would outperform current forecasts.
Elsewhere, head of the Confederation of British Industry (CBI), Carolyn Fairbairn, told the BBC Radio 4’s Today Programme that in a ‘no deal’ scenario, “The hammer blow to our economy would be enormous and I think many smaller businesses can’t properly prepare and that just doubles the potential impact if we go over that cliff,” adding that “Businesses also think we should be getting behind the Chequers proposals because that is a way through this… We have the beginnings of a blueprint. Let’s work with that.”
Elsewhere, the Government yesterday released a second round of documents outlining information for businesses and citizens to prepare for a ‘no-deal’ Brexit scenario. It warns that UK car manufacturers would need to obtain certificates showing that they comply with EU safety and environmental standards, while EU manufacturers would need to obtain relevant UK certification. The Government also states that free mobile roaming could not be guaranteed in case of ‘no-deal’ and that mobile phone bills for people in Northern Ireland could increase due to “inadvertent” data roaming coming from signals from the Republic of Ireland.
Additionally, the UK government confirmed that Irish citizens in the UK will continue to benefit from their current rights under the Common Travel Area (CTA) in the event of a ‘no-deal’ Brexit. These include the right to work, study, vote and access social welfare benefits and health services in the UK. The government notice added, “Where required domestic legislation and agreements would be updated to ensure that the CTA rights continue to have a clear legal basis.” It also notes that the Irish government “has been clear…in its commitment to the continuation of the CTA.”
Meanwhile, Shadow Brexit Secretary Sir Keir Starmer said yesterday, “The government still has no credible plan for Brexit. The cabinet should be planning to negotiate a good deal for Britain, not planning for failure or blaming businesses for the government’s chaos.”
Anna Nadibaidze: Europe reacts to Juncker's "The Hour of European Sovereignty" speech
In a new blog, Open Europe’s Anna Nadibaidze reviews the reactions to European Commission President Jean-Claude Juncker’s last State of the Union speech, entitled “The Hour of European Sovereignty.” She writes, “Despite the fact that most of the attention focused on the European Parliament’s vote to launch Article 7 procedures against Hungary, there was also a variety of mixed reactions to Juncker’s proposals.” The review shows that many EU politicians welcomed Juncker’s proposals for a stronger and united Europe, but do not always agree on the means to achieve this goal. Meanwhile, the European media was mostly critical, pointing to the “state of disunion” among member states and questioning the Commission’s success in bringing closer European integration.