Ross Clark Ross Clark

Mark Carney is finally realising the benefits of Brexit

Given what he has previously said about Brexit it would be a bit much to expect departing Bank of England governor Mark Carney to say that leaving the EU is a good thing for Britain. Nevertheless, it is still a bit of pleasant surprise to hear him in what – in Carney-speak – is presumably the next best thing. In an interview with Reuters, he has just described Brexit as a ‘conceptual positive’ for the UK economy. If you are not quite sure what one of those is, he did go on to spell it out in a little more normal language:

It is a major reordering of our relationship not just with the European Union but our trading relationships with the rest of the world and it is prompting a reassessment of economic policy, structural economic policy in the country… We are already seeing a rebound in confidence, business confidence and to some extent a firming of consumer confidence.

Carney’s change of heart is perfectly logical: he is managing his own reputational risk

Given that this is the same man who in May 2016 warned of a ‘technical recession’ if the country voted for Brexit, and who in 2018 was warning of the steepest economic slump since World War II if we dropped out of the EU without a deal, this is quite some turnaround indeed. More remarkably still, he is advancing exactly the same arguments as the Leave campaign: he is effectively saying that freeing ourselves from EU regulation and protectionism could – so long as the right decisions are made – allow us to escape the low economic orbit of the EU into a higher trajectory.

Carney made a similar point in an interview with the FT in January, in which he argued that diversifying from EU financial regulations could prove an advantage for the City.

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