Ben Broadbent has suggested economy growth over the last year means we should not worry about Brexit
Ben Broadbent, deputy governor of the central bank, said the economy’s growth over the last year suggested it would remain strong whatever the outcome of the Brexit negotiations.
His remarks follow a series of Daily Express telephone surveys recording overwhelming support for the Government walking away from the Brexit negotiations without a deal.
Mr Broadbent told BBC Radio 4’s Today programme yesterday: “We have forecast, as very long run outcomes, a range of possible deals and we have also said we assume in our forecasts that there will be a smooth transition to those, which essentially means we’re not assuming a no-deal outcome.”
Mr Broadbent added: “What is true, is that the Financial Policy Committee, and I think this is the right way round, which worries about, or thinks about, sort of tail risks, potential disruptions – that’s its job really – has modelled various aspects of what could happen without a deal and was able to say at the end of last year that the stress test that it puts on the banking system once a year to try and see whether it’s got enough capital was at least as severe we thought as a no-deal outcome.
We do think, and I think this is very important, that the core of the financial system – given how much capital has been added – would be robust to such an outcome
“So we do think, and I think this is very important, that the core of the financial system – given how much capital has been added – would be robust to such an outcome.”
The senior Bank of England official’s remarks are likely to be seized upon by Brexit campaigners who want Theresa May to scrap the current negotiations with the EU.
A walk out has been backed by Daily Express readers in a series of phone polls. In one survey in September last year, 99% of callers agreed that Britain should “quit the EU without a deal”. A similar poll the same month found that 99% of callers thought Britain should “walk away from the EU without a deal”.
And in December last year, 96% of callers in an Express phone poll did not “trust” the EU “to give a fair trade deal” to Britain. Only 4% of callers in the survey were prepared to trust the EU.
Mr Broadbent was speaking a day after the Bank of England upgraded its growth forecast for the UK economy this year from 1.6% to 1.8%.
The senior Bank of England official’s remarks are likely to be seized upon by Brexit campaigners
And new official data yesterday showed that demand for British goods and services from overseas soared in the year since Britain voted to quit the EU.
UK exports rose 11.3% by £62billion to £617billion in the first full-year results since the referendum, figures from the Office for National Statistics showed.
The country’s service sector continued to thrive with exports up 8.7% to £274bn, increasing the service surplus in the last year.
Goods exports also rose strongly by 13.4% to £342billion, with best sellers including cars, mechanical and electrical machinery. Some of the top markets for the country’s goods were the USA, China, Germany and France.
Exports continue to grow faster than imports with the overall trade deficit narrowing by 17.3% from £40.7billion to £33.7billion – a narrowing of £7.0billion in the last year.
International Trade Secretary, Dr Liam Fox said: “In the first full year after the EU referendum, demand for British goods and services is higher than ever with exports rising by £62.5billion and the trade deficit narrowing by £7billion in 2017.
“As I meet my counterparts across the world, one thing always stands out: our country’s reputation for producing trusted, high quality products.
“These new figures are a testament to the hard work of companies up and down the country. As an international economic department, we will continue to build on this success by helping more companies export through our Exporting is GREAT campaign and network of trade advisers.”
In a further boost, statistics from the Office for National Statistics also released yesterday showed manufacturing output reached its highest level since February 2008.
Mr Broadbent was speaking a day after the Bank of England upgraded its growth forecast for the UK
The figures we welcomed by leading industry bodies as the increase in trade shows how Britain’s trading presence has maintained post-Brexit despite negative forecasts.
Stephen Martin, director general of the Institute of Directors, said: “One of the UK’s key objectives over the coming years must be to raise our game on international trade. We have to get more companies selling abroad, increase volumes from current exporters, strengthen links with existing trade partners, and forge new ones in markets where our reach is currently limited.
“We have great companies, some world-leading industries and huge potential. The trade narrowed shrank between 2016 and 2017, and IoD member exports are up, but there are still significant challenges ahead, so it is imperative that the Department for International Trade and businesses work together to deliver a step-change in our trade performance.”
Last night, another Bank of England official signalled the City of London will remain a leading global financial centre after leaving the EU.
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In a speech in the US, Sir John Cunliffe, the bank’s deputy governor for financial stability, said: “Despite perceptions in some quarters to the contrary, the UK’s role as the leading international financial centre does not rest or depend exclusively on the EU single market in financial services.
“The UK has the largest asset management industry in the EU. But this is not built primarily on the management of the pool of European savings.
“Well over 50% of the roughly 8.5trillion US dollar assets under management in the UK are pensions, insurance and investments of UK citizens.
“Another 20% comes from the rest of the world beyond the EU.”