Showdown time: Carney under fire from Treasury select committee on Brexit vote comments

 
Hayley Kirton
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Mark Carney Begins Role As New Governor Of Bank Of England
Carney made remarks warning about the economic consequences of a Brexit vote in May (Source: Getty)

Bank of England boss Mark Carney has today had to rebuff allegations that he frightened the public into voting for Remain in the referendum.

Andrew Tyrie, chair of the Treasury committee, put it to Carney that there had been a "deliberate attempt to frighten the voting public by the Bank with a political motive" which would "put an end to Bank of England independence".

Tyrie added that the allegations about the Bank's actions being inappropriate had been brought to him via various other politicians.

In May, Carney made remarks warning that a Brexit vote could plunge the UK into a recession.

At the time, he was slammed by several MPs for becoming too politically involved. Eurosceptic conservative MP and member of the Treasury select committee Jacob Rees-Mogg was particularly critical, going as far as telling City A.M. that he should be fired.

But today Carney pushed back at the allegations, remarking that the statements made in the run up to the referendum were sparked from "robust discussions about where we [saw] the risks".

Brexit Britain: What you need to know

Carney added that if the Bank of England "views something as the biggest risk", it had an obligation to raise its concerns. The governor added that any debate should be focused on "whether we made the right assessment...not whether we should have made the assessment".

Richard Sharp, external member, Financial Policy Committee, Bank of England, pushed back the allegations by stating that they had been through economic models concerning what could happen in the event of a Brexit, which showed there would be a "profound shock to the economy".

"Much of what was articulated in the model has transpired," Sharp added, pointing particularly to the plummet in banks share prices following the Brexit decision announcement.

Donald Kohn, a member of the Financial Policy Committee remarked that the banks analysis of the economic models "largest near term risk to financial stability".

Treasury committee member Rachel Reeves also lent her support to the Bank of England's remarks, pointing out that, given what had happened following the Brexit vote, people would have seen the Bank as remiss for not putting out a warning in advance.

Tyrie also added the prominent Brexiteer Boris Johnson had also passed on his regards for the "excellent job" Carney was doing.

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