Mark Carney told to clarify dramatic house price fall warning in case of 'no-deal' Brexit

Governor Mark Carney Presents Bank of England's Financial Stability Report
Mark Carney set out the Bank of England's preparedness for Brexit to Cabinet last month (Source: Getty)

Bank of England governor Mark Carney needs to clarify whether house prices would be slashed by a third in a 'no deal' Brexit, the chair of the Treasury select committee has insisted.


Nicky Morgan has written to Carney asking him to clear up exactly what he told the Cabinet on September 13 during a presentation on the risks of the UK leaving the EU without a trade deal.

The BBC reported he told ministers that in a worst-case scenario house prices could fall by 33% over three years.

However, it was later claimed the governor was setting out what the Bank of England was prepared for - not what it was forecasting.

In a letter to Carney, Morgan asked for clarity on the issue, and said: "I note the confusion surrounding your briefing to Cabinet on 13 September, and in particular media reports that this contained a forecast that house prices would fall by a third in a 'no deal' scenario.


"I would be grateful for confirmation that what you set out to Cabinet was in fact the Bank's 2018 stress test scenario (which includes a 33 per cent fall in residential property prices as one of its parameters), which in turn is being used to draw inferences about [the] Bank's preparedness for 'no deal'."

Morgan also used the letter to urge Carney to provide a "full and frank" assessment of the various outcomes of Brexit, including the deal agree by the UK and EU.

The former Education Secretary asked for that analysis to be handed over to MPs before Parliament has a vote on the deal Theresa May plans to bring back from Brussels.

She made a similar request in a letter to the Financial Conduct Authority.

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