EU referendum: Governor of the Bank of England Mark Carney says risks around the EU referendum are the biggest facing the UK economy

James Nickerson
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Carney said the economy in general is performing well (Source: Getty)

Risks surrounding the EU referendum are the biggest that face the UK's economy, the governor of the Bank of England has warned.

Mark Carney said that while the economy is generally performing "pretty well", in the short term it appears to be slowing, which is likely to be related to issues around the referendum.

"Our view is in general the economy is performing pretty well. Unemployment is coming down, it is around five per cent in the north west and slightly higher nationally," Carney told the Manchester Evening News.

"Wages are growing slowly and over time should pick up. Over time it will likely be appropriate to make modest and gradual interest rate rises. There are big forces globally that are putting downward pressure on prices.

Read more: Is George Osborne right to blame slowing economic growth on the EU referendum?

"In the very short term the economy appears to be slowing, probably related to issues around the referendum. One of the responsibilities of the Bank of England is to manage risk and financial stability.

"Risks around the [EU] referendum are the biggest risks facing the UK economy, we have contingency planning to decrease the potential impacts of uncertainty."

The result of this risk, as well as other global factors, mean interest rates are to rise only "modestly" in the future.

Read more: Economists launch new pro-Brexit report attacking EU as an "evil" customs union

Carney's comments come after chancellor George Osborne blamed slowing economic growth on the EU referendum. Figures released yesterday showed economic growth slowed to 0.4 per cent for the first quarter of 2016.

And earlier this month the Bank of England's monetary policy committee minutes warned that Brexit could do serious harm to the economy.

Today the Leave campaign hit out at warnings from institutions including the Bank of England, International Monetary Fund and Organisation for Economic Cooperation and Development, by unveiling a report titled Economists for Brexit.

The eight economists said leaving the 28-member bloc would lead to lower prices, more jobs and faster economic growth.