The Bank of England has relaunched its ‘Project Fear’ campaign after claiming that in the result of a clean, no deal, break from the European Union, the UK will suffer a massive fall in GDP and a sharp rise in unemployment.
Governor Mark Carney said Theresa May’s exit plan would also damage the economy, but a “no deal” Brexit free from all EU rules and regulation would be a “worst-case scenario.”
He said the bank’s assessment, conducted on request of the Government, found that in the eventuality of a ‘No Deal’ with no “transition period,” there would be sudden tariff barriers and border problems “for some time.”
The doomsday prophesies also claimed the pound would fall by 25 per cent; by 2023, GDP will be 10 per cent lower; unemployment would double to 7.5 per cent; house prices would fall by 30 per cent; and commercial property prices would crash by 48 per cent.
Brexiteer and Chairman of the European Research Group Jacob Rees-Mogg called Mr Carney’s predictions, “Project Hysteria,” recalling the other dire forecasts by the Bank of England before the June 2016 referendum.
“This Project Hysteria,” the Tory backbench MP is reported to have said. “Before the referendum, we were threatened with the plague of frogs. Now they warn of the death of the first born.
“The Bank of England has gone from being discredited to being hysterical.”
Mr Rees-Mogg, who claimed the bank is politicised and is no longer independent, added: “The reputation of the Governor has plummeted by more than any economic indicator.”
Persistent claims ahead of the referendum by Governor Carney that a Brexit vote could result in a recession were subsequently dismissed as “very flawed and very partisan” by analysts from Cambridge University.
In January 2017, chief economist of the Bank of England Andrew Haldane made a frank admission, drawing comparison between the Bank of England’s pre-referendum prediction to forecasters’ failure to predict the financial crisis in 2007, likening their inaccurate Brexit prophecies to “Michael Fish getting up [and] saying [there’s] no hurricane coming.”
Mr Haldane also admitted that his profession was “in crisis” as Britain’s economy was hailed as the “strongest in the world.”
Earlier on Wednesday the Treasury also made negative predictions for the state of the economy after Brexit, which were strongly rebuffed by Brexiteers.
Speaking shortly before the bank’s announcement, former Brexit secretary David Davis said: “We must be ready for Project Fear 2.0.”
He also calls for a “clean Brexit that ensures a decisive break from the influence of a foreign power” and slammed Mrs May’s deal as a “bogus prospectus — we will be nothing more than a satellite state ruled from afar.”
After the Brexit referendum, Mr Carney was accused of being a “stooge” for the then Chancellor George Osborne, with his dire warnings forming the basis of the chancellor’s Project Fear predictions.
More than two years after the vote to leave, unemployment is at a record low and wage growth is at its highest level in a decade.