Britain’s top banker took a dig at Boris Johnson today as he questioned whether Brexit would lead to “a land of cake and consumption.”
The Foreign Secretary famously remarked he is “pro having my cake and pro eating it” when it comes to the EU – suggesting the UK could enjoy all the benefits from the bloc while still being able to strike its own trade deals.
Delivering the annual Mansion House speech this morning, Bank of England Governor Mark Carney warned businesses are preparing to activate “contingency plans” as they wait to see if the Brexit negotiations really do deliver such an arrangement.
Carney also cautioned against what the Bank of England can do to tackle “the weaker real income growth” which will hit homes immediately after Brexit.
Chancellor Phillip Hammond also mocked a high-profile Tory in his speech, joking that employment has risen in the UK “even if we count George Osborne just once.”
He too talked up the importance of securing a transitional arrangement for when the UK leaves the EU in order to prevent “dangerous cliff edges.”
Hammond used his speech to repeat his claim that “Britain is weary” of austerity – although he ruled out any additional borrowing.
But it was Carney’s remarks on Brexit that were the most stark, with the Governor saying: “Monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU.
“But it can influence how this hit to incomes is distributed between job losses and price rises.”
He added: “Depending on whether and when any transition arrangement can be agreed, firms on either side of the channel may soon need to activate contingency plans.
“Before long, we will all begin to find out the extent to which Brexit is a gentle stroll along a smooth path to a land of cake and consumption.”
Business has created 3.4million more private sector jobs, and that’s even if we count George Osborne just once.” Chancellor Philip Hammond
Hammond also focused on securing a transitional deal in his remarks as he set out his three steps for achieving a “Brexit for Britain”.
He said: “Firstly, by securing a comprehensive agreement for trade in goods and services.
“Secondly, by negotiating mutually beneficial transitional arrangements to avoid unnecessary disruption and dangerous cliff edges.
“Thirdly, by agreeing frictionless customs arrangements to facilitate trade across our borders – and crucially – to keep the land border on the island of Ireland open and free-flowing.”
Hammond further developed comments he made at the weekend that the Government was “not deaf” to the fact that “people are weary of the long slog” of eradicating the country’s deficit.
He said: “Travelling the country in the general election campaign I’ve had hundreds of conversations reflecting the challenges and issues that people face in their daily lives: fears about job security; about wage levels; the need for good schools for their children; a well-functioning health service; decent care for elderly relatives; or access to the housing market.
“And it’s clear, as many of my colleagues have noted, that Britain is weary after seven years of hard slog repairing the damage of the great recession.”
The Chancellor ruled out higher borrowing to fund public services, but did not make the same pledge on tax rates, only saying: “The government will remain committed to keeping taxes as low as possible.”
When it came to economic growth, Hammond said: “Last year we grew faster than any other major advanced economy bar Germany, business has created 3.4million more private sector jobs, and that’s even if we count George Osborne just once.”