Carney: Brexit deal ‘positive’ for UK economy

Media caption‘Deal takes away the tail risk of a disorderly Brexit’

The governor of the Bank of England has told the BBC that the new Brexit deal struck by the government is “welcome” and a “net economic positive”.

Mark Carney said the deal “takes away the tail risk of a disorderly Brexit”.

However the governor warned that the deal might not boost the economy to the same extent as the deal put forward by Boris Johnson’s predecessor, Theresa May.

Mr Johnson’s deal is due to be voted on by MPs on Saturday.

Mr Carney said that the “different” future relationship negotiated this week meant it “remains to be seen” if overall the deal would be as positive for the economy as the deal put forward by Mr Johnson’s predecessor, Theresa May.

When pressed about the impact of extra customs checks likely from the more distant relationship with the EU envisaged by the new deal, Governor Carney said its economic outcome would not “overlap” the closest version of the previous Theresa May deal, “and that last bit is diplomacy”.

“The new economic partnership remains to be negotiated so there’s still a wide range of potential relationships that can be struck on the basis of this deal, but short term, it takes away these risks,” said Mr Carney.

“Last night in the G20 room it was universally welcomed that this progress had been made because, if I put this into context – the world’s global economic outlook – the world is in a precarious position – I’m quoting the IMF – and directionally we’d agree with that characterisation.”

The chancellor of the exchequer himself Sajid Javid has been less diplomatic – refusing to recalculate Treasury impact assessments which previously showed a smaller economy from a basic free trade agreement, as requested by some MPs in time for the crucial Commons vote on the deal.

That decision has drawn criticism from those who think MPs should have an updated version of the impact the deal.

Catherine McKinnell MP, Interim Chair of the Treasury Committee, has written to the Chancellor asking him to publish an updated economic analysis ahead of the vote on Saturday.

“The Treasury Committee asked HM Treasury whether the Government has updated its economic analysis of Brexit three months ago, yet we are still awaiting a response,” she wrote.

“It appears to be an attempt to avoid scrutiny. If the Chancellor does not provide the Committee with an update, we can only assume that the existing analysis stands.”