Bank of England to publish Brexit deal analysis next week

LONDON — The Bank of England will publish its economic analysis of Prime Minister Theresa May’s Brexit deal next week as well as an assessment of what would happen if Britain crashes out of the European Union with no deal.

The assessments will be sent to lawmakers on the Treasury Select Committee on Nov. 29 “in good time before any parliamentary vote,” Governor Mark Carney said Tuesday.

However, Carney said the bank won’t publish an assessment of there being no Brexit.

May is aiming to get the backing of EU leaders on Sunday for the withdrawal deal her government agreed on with the EU’s executive Commission. She is also looking to flesh out a political declaration about the future relationship with the EU.

In his first public comments since May agreed on the draft withdrawal agreement, Carney emphasized the importance of a transition period after Britain formally leaves the EU on March 29.

Carney said he expects the withdrawal agreement to “support economic outcomes” as it would eliminate some of the uncertainty that has surrounded the British economy since the country voted to leave the EU in June 2016.

Part of the deal involves Britain following EU rules after Brexit day until the end of 2020. However, there’s scope for that transition to be extended and that would provide businesses more time to adapt to new relations with the EU.

May’s deal with the EU on how Britain leaves the EU has been met with widespread opposition within the British parliament, raising the prospect that it might be voted down. If the parliament votes against it, Britain could crash out of the EU without a deal.

Carney said “we’re going to find out relatively soon” whether a no-deal Brexit has become more likely.

Bank of England policymakers warned that British businesses are increasingly concerned about the prospect of a no-deal scenario that could see tariffs placed on British exports, border checks reinstalled, and restrictions imposed travellers and workers.

The bank’s chief economist, Andy Haldane, told lawmakers that Brexit uncertainty is the “single largest headwind” to the British economy and that the impact has become “somewhat greater” in recent weeks amid talk of a no-deal Brexit.

As a result, he said, British economic growth is set to be “somewhat weaker” in the fourth quarter from the quarterly rate of 0.6 per cent recorded in the third.

Michael Saunders, another rate-setter at the bank, said most businesses were not ready for a no-deal Brexit.

Pan Pylas, The Associated Press