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Brexit now 'bigger risk to rest of the EU' as impact on Britain lessens

Mirror logo Mirror 11/01/2017 Jack Blanchard
Credits: Getty© Provided by Trinity Mirror Plc Credits: Getty

The danger Brexit poses to the UK economy has lessened, according to the Bank of England Governor.

In a major U-turn, Mark Carney backtracked­ on warnings of a recession if Britain voted to leave the EU – and said Brexit now posed a bigger threat to the rest of Europe.

Mr Carney told MPs: “In the run-up to the referendum, we said it was the largest risk because things that could have happened could have had financial­ stability consequences­.

“But having got through the night and day after, the scale of risks around Brexit has gone down to the UK.”

He suggested a Treasury decision to hand him £250billion to inject into markets if needed had been key to averting a crisis.

Mr Carney added: “We would like to say this had some success.”

And he warned EU leaders that any bid to damage Britain’s powerful financial­ services in Brexit talks could backfire, insisting: “There are greater short-term risks on the Continent­ in the transition than in the UK.”

Brexiteer Tory MP Peter Bone said it would be “nice” if he apologised for his pre-referendum comments, adding: “It proves the British people were right and banking experts wrong.” 

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Mr Carney also used his appearance before the Treasury Select committee to call for a “transitional” deal to extend Britain’s relationship­ with the EU for several years. He said it would mitigate risks.

Xavier Rolet, chief executive of the London Stock Exchange Group, told the committee on Tuesday the financial services industry should be handed a five-year transition period after Article 50 is triggered.

His call for a “ Brexit Bridge” was echoed by Douglas Flint, group chairman of HSBC.

Brexit Secretary David Davis has said he would accept a transitional arrangement­ “only if it’s necessary”.

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