BANK OF ENGLAND WARNS BREXIT COULD SEE POUND PLUMMET

Money - budget 2

LONDON (Alliance News) – A Brexit vote is likely to send the pound plummeting as pre-poll jitters are already hitting the housing market, the Bank of England has warned.

The intervention came as the Bank’s governor Mark Carney insisted he has every right to comment on the economic impact of withdrawal after being accused of breaking impartiality rules by a leading Leave campaigner.

The Bank insisted it is “increasingly probable” a Leave vote in next week’s referendum would sharply damage the value of sterling across international money markets.

Financial experts warned uncertainty surrounding the outcome of the poll is already forcing consumers to put off “major economic decisions” and provoking a slowdown in house and car sales.

The Bank insisted the referendum remains the “largest immediate risk” facing financial markets, as its Monetary Policy Committee decided to hold rates at the 0.5% level they have been at since March 2009.

The latest foray into the increasingly bitter referendum debate came after an angry war of words exploded between Carney and prominent Tory MP and Leave campaigner Bernard Jenkin.

Bank sources revealed Carney considers a letter from Jenkin stating that the governor had made his views on the referendum public despite strict impartiality rules to be a “political threat”.

Commons Public Administration Committee chairman Jenkin hit back by branding the governor “very aggressive”.

In a strident response, Carney said Jenkin’s letter contained “numerous and substantial misconceptions”. Carney also accused Jenkin of having a “fundamental misunderstanding” about the independence of the Bank.

The governor wrote: “All of the public comments that I, and other Bank officials, have made regarding issues related to the referendum have been limited to factors that affect the Bank’s statutory responsibilities and have been entirely consistent with our remits.”

Jenkin said Carney’s intervention in the referendum debate has gone “way beyond what a Bank governor would normally do in terms of making statements about rate setting and economic forecasts”.

He told BBC Radio 4’s Today show: “He’s reacted very, very aggressive towards me. There is no doubt that the appearance he made on the Andrew Marr programme went way beyond what a Bank governor would normally do in terms of making statements about rate setting and economic forecasts.”

“I obviously misconstrued that because in my letter to him I said he had made his views clear that he wants the United Kingdom to stay in the European Union.”

Lord Darling, Labour ex-chancellor, accused Jenkin of engaging in a “blatant attempt to muzzle a respected independent voice”.

By Shaun Connolly and Holly Williams, Press Association Staff

Source: Press Association

Copyright 2016 Alliance News Limited. All Rights Reserved.

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