Mark Carney denies '˜peddling scare stories' ahead of EU vote

BANK of England governor Mark Carney has denied allegations that policymakers used scare tactics to sway voters in the run up to the EU referendum vote.

Mark Carney, Governer of the Bank of England, is accused of "startling dishonesty" during EU referendum. Picture: Ian Rutherford/TSPL
Mark Carney, Governer of the Bank of England, is accused of "startling dishonesty" during EU referendum. Picture: Ian Rutherford/TSPL

In his first hearing with MPs since the Brexit vote, Mr Carney was grilled on accusations of “startling dishonesty” and of “peddling phoney forecasts and scare stories” made last month by two former chancellors and two former Conservative party leaders.

Mr Carney insisted he had no meetings with Chancellor George Osborne to discuss the Bank’s line on the Brexit risks before last month’s referendum and said the accusations were “extraordinary”.

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He told MPs the discussions and assessments made by the Bank’s Financial Policy Committee (FPC) were “not pre-judged or pre-decided”.

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Mr Carney had warned that a decision to leave the EU could tip the UK into a recession and lead to sharp falls in the value of the pound ahead of the vote.

The comments were slammed at the time by supporters of the Leave campaign and led to calls for Mr Carney to resign as the Bank’s independence came into question.

In a letter to the Telegraph before the vote last month, former Tory leaders and chancellors Iain Duncan Smith, Nigel Lawson, Norman Lamont and Michael Howard wrote: “There has been startling dishonesty in the economic debate, with a woeful failure on the part of the Bank of England, the Treasury, and other official sources to present a fair and balanced analysis.

“They have been peddling phoney forecasts and scare stories to back up the attempts of David Cameron and George Osborne to frighten the electorate into voting Remain.”

Andrew Tyrie, chairman of the Treasury Select Committee, said they were “very serious allegations”.

But Mr Carney and fellow members of the FPC told MPs the Bank’s warnings were made after “robust discussions” within the committee.

“I did not prejudge the lines of the policy committee and nor could I,” Mr Carney insisted.

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He added he did have discussions with Mr Osborne about the risks surrounding Brexit, but not on the lines the Bank would take.

MPs asked Mr Carney to make public the minutes of his meetings with Mr Osborne, although Mr Carney said he believed bank governors and the Chancellor should be able to have “free flowing discussions” away from the public glare.