Bank of England governor Mark Carney to face grilling from MPs over potential impact of EU referendum

Chris Papadopoullos
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Bank Of England Inflation Report Press Conference
Mark Carney has revealed the Bank has contingency plans in case of Brexit, but has refused to elaborate on what those are (Source: Getty)

Bank of England governor Mark Carney and several of his deputies will likely have to clarify the risks associated with the June referendum on EU membership when they face a grilling from MPs tomorrow.

While Carney tried to keep quiet on how the Bank would respond to the upcoming referendum on UK membership of the EU at the press conference of the inflation report, he is likely to face more thorough questioning from MPs on the issue.

Many economists have pegged back their expectations for the first interest rate hike due to the impending referendum.

The Bank has contingency plans should the UK opt to leave the EU, but has ruled out sharing the details of them. In its latest report on financial stability it hinted that the deficit in the current account, which is the amount the UK exports over what it imports plus cash earned on UK-owned assets abroad, could pose a problem. If the UK cannot fund its current account, it puts downward pressure on the value of the pound.

The financial stability report said: “Ease in financing the current account deficit rests on the credibility of the UK macroeconomic policy framework and its continuing openness to trade and investment. The United Kingdom has maintained this confidence in recent years but it is important that this continues.”

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