Mark Carney, the governor of the Bank of England, is hatching a secretive plan to keep British business locked in the European Union’s (EU) single market for up to another five years.
The Canadian banking boss is urging business leaders to demand a period of “continuity” after Brexit negotiations conclude, and is pushing for what he calls a “Brexit buffer” in the City, The Sunday Times reports.
According to the paper, the governor has held a number of private meetings and dinners in the past fortnight to woo big business and persuade them to unite behind his plan.
The plot could mean companies continue to operate under the EU’s current trading rules until 2021, possibly including being subjected to EU regulation and even European free movement and open borders.
The governor, who is due to step down in June 2019, hosted two dinners — one last Monday at Chatham House for about 50 senior investment bankers and the second on Wednesday for finance directors of the high street banks.
“Carney knows there needs to be a two to three-year extension to allow Britain to adjust from the old rules under Europe to the new order. His key word is continuity,” said a banker who attended the Chatham House dinner.
Mr Carney infamously broke the Bank’s pledge to remain politically neutral during the referendum campaign, coming out in support of saying inside the EU.
In the lead up to the referendum, he followed the then Chancellor George Osborne in claiming there would be recession if Britain voted to leave the EU.
“Brexit, to my mind, would have a material impact on growth and inflation. It would be likely to have a negative impact in the short term”, he said in May.
However, since the shock result in June, the UK economy has performed well, with unemployment at a near record low and consumer confidence and growth remaining strong.