Hitting back at the critics, Bank of England governor Mark Carney told MPs today that the recent scenarios set out by the BoE reflected preparatory work to ensure banks and other lenders were ready for Brexit, and were not off-the-cuff forecasts.
“There’s no exam crisis. We didn’t just stay up all night and write a letter to the Treasury Committee,” Carney said, adding: “You asked for something that we had, and we brought it, and we gave it to you.”
In his evidence to Parliament’s Treasury Committee, Carney also insisted that the scenario “is not the most likely thing to happen.”
“Tail risk is tail risk,” he said, adding that it was “low probabilty that all these risks would happen at the same time.”
Meanwhile, Carney also told MPs that in the most “extreme” case, prices would rise by 10 per cent, but in a less severe scenario, the increase would be about 6%.