LONDON (Reuters) - A senior British lawmaker asked Bank of England Governor Mark Carney on Thursday to clarify whether he had told ministers that house prices in Britain could slump by about a third if the country fails to secure a Brexit deal.
Nicky Morgan, who chairs the Treasury Select Committee in Britain’s parliament, made the request in a letter to Carney in which she reiterated that the BoE should produce an analysis of the impact of Brexit before any vote on parliament on a deal.
Several British newspapers said last month that Carney told ministers in a private meeting that mortgage rates could surge and house prices fall by 35 percent over three years if there was a chaotic no-deal Brexit.
The BoE declined to comment on the reports at the time, and Carney did not address them directly in a public appearance on the day of their publication.
The reports revived criticism of Carney from some Brexit supporters who accused him of overstepping his remit when he warned in 2016 that Britain’s economy would be hit if voters decided to leave the European Union.
They were angered again by more recent comments from Carney saying the economy would be damaged if there is no deal to smooth Britain exit from the EU
Morgan, who opposed Brexit before the referendum, said in her letter to Carney that she wanted to know if Carney had been referring to the extreme financial scenarios used last year by the BoE for its tests of banks’ financial health, or if he was giving a more specific warning.
The Royal Institution of Chartered Surveyors said earlier on Thursday that Carney’s reported remarks had weighed on some of its members’ views about the outlook for the housing market.
“If you have anything further to add, both about the content and scope of your briefing, and the subsequent reporting of it, I would be grateful if you could do so in your response to this letter,” Morgan asked Carney in her letter.
The Treasury Committee has also asked Britain’s finance ministry and its Financial Conduct Authority regulator to assess the impact of Brexit.
Writing by William Schomberg; Editing by Andrew Heavens
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