MW: Bank of England chief wants ‘clarity’ on U.K. relationship with EU
LONDON — Uncertainty about whether the U.K. will remain in the European Union hasn’t deterred British businesses from investing, although clarity on the issue would be a positive development for the economy, Bank of England Governor Mark Carney said Thursday.
U.K. Prime Minister David Cameron has pledged to negotiate a “better deal” for Britain and then hold a referendum by the end of 2017 on whether to stay in the 28-nation bloc or pull out. The prime minister, whose Conservative Party swept to victory in U.K. elections last week, has repeatedly said he wants the U.K. to remain in a reformed EU. Read: Risk of Britain leaving the EU just got real
The Bank of England on Wednesday lowered its growth forecasts for the economy this year and next, citing continued slow progress in increasing productivity, or the output for each hour worked. Low levels of investment during the years since the financial crisis is one reason for that disappointing performance.
But in an interview with the British Broadcasting Corp., Carney said the risk of a U.K. departure from the EU hasn’t been a factor in weak investment.
“We talk to a lot of bosses,” he said. “There has been an awareness of political uncertainty. They have not acted on that uncertainty. In other words, they are continuing to invest, they are continuing to hire.”
Nevertheless, Carney said it would be a boost to the economy if a decision on the U.K.’s future relationship with the EU could be reached, although he declined to comment on how rapidly the government should move on the issue, saying only that it should do so “with all deliberate speed.”
“It’s in the interest of everybody that there is clarity,” he said.
