Carney Takes Shot at EU over Post Brexit Financial Stability

GBP

Bank of England governor Mark Carney sent a warning to EU officials that they are not putting in sufficient effort to preserve financial stability post-Brexit. The EU has not matched commitments by the UK government to allow European firms to continue to operate in Britain, Carney said.

The most urgent need is an agreement to secure a legal basis for contracts to continue to function once the UK leaves the EU. Derivative contracts used to manage market risks with a notional total value of £96 trillion are in danger, the Bank said. Carney went on to say that derivative contracts are “the biggest remaining risks of disruption” as the UK leaves the EU in March 2019 and this could cause credit costs to surge.

Parliament’s spending watchdog warned yesterday the Brexit divorce bill for the UK could be at least £10bn higher than the £35bn-£39bn figure put forward Theresa May earlier this year. Any cash boost that might come in the wake of the UK’s succession from the EU is “some years away”, the Public Accounts Committee said.

The £10bn shortfall includes nearly £3bn of payments the UK will make to the European Development Fund, the EU’s main way of providing overseas development aid, after withdrawal, the committee stated in a report.

Scottish First Minister Nicola Sturgeon has moved one of her key allies into a campaigning role because she thinks the United Kingdom could hold a national election just before it is due to leave the European Union. Sturgeon’s pro-independence Scottish National Party says it must be prepared for every eventuality as May, who leads a deeply divided party and country, struggles to strike a Brexit deal with the EU before exiting the bloc in March 2019.

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13:30 -USD: US Gross Domestic Product (Q1) expected to be unchanged at 2.3%