Lawson rebukes Bank chief on Brexit warning

Nigel lawson tore into the governor of the Bank of england last night for making an ‘entirely political’ intervention in the EU referendum debate.

giving evidence to MPs, Mark Carney endorsed the Prime Minister’s renegotiation deal with Brussels and said leaving the EU was the ‘biggest domestic risk’ that Britain faced.

lord lawson said: ‘This was entirely political and i think it is quite wrong for a governor of the Bank of england to enter the political fray in this way.

‘i have known all six of his immediate predecessors. Not one of them would’ve considered it proper to make an intervention of that kind. i believe he is talking nonsense and, if i may say so, he was doing it for political reasons.’

Asked if he had evidence Mr Carney, who was appointed by george Osborne, had been pressurised, lord lawson, who is a leave campaigner, replied: ‘Well i think it would please the Chancellor of the exchequer who appointed him. After all in two years’ time he’s going back to Canada, and... no doubt to goldman Sachs and so he felt free to do it.’

in evidence to MPs, Mr Carney denied being influenced by Number 10 and insisted he was not telling the country how to vote in the historic June 23 poll.

But leave campaigners were enraged by his suggestion that EU membership makes the UK economy more dynamic and leaving would be a gamble. They also criticised Mr Carney’s claim that David Cameron’s much-derided renegotiation with Brussels had addressed concerns over the threat posed by Brussels to the City of london.

During a stormy Treasury committee session, Tory MP Jacob Rees-Mogg accused Mr Carney of ‘political partisanship’ and focusing on the positive aspects of EU membership.

Mr Rees-Mogg told the bank chief: ‘You are coming out with the standard statements of the pro-EU group. The statements you make about the dynamism of the economy could just as well refer to reforms introduced by Margaret Thatcher. it is speculative and beneath the dignity of the Bank of england to be making speculative PRO-EU comments.’

Mr Carney dismissed the attack as ‘wholly unfounded’. He added: ‘i have not had conversations with the Prime Minister about what i might say about the european Union.’

But eurosceptics pointed out that Mr Carney’s views were largely in line with the government’s Project Fear strategy. Mr Carney said so-called Brexit could trigger a prolonged period of financial instability and have serious consequences for the housing market and City of london.

The governor, who was criticised for making similar remarks during

‘He was doing it for political reasons’

the Scottish referendum, said: ‘The issue is the biggest domestic risk to financial stability, because in part of the issues around uncertainty. But also because it has the potential – depending on how it is prosecuted and how these issues can be addressed – to amplify the risks … around housing, potential risks around market function which we are trying to mitigate. And also associated risks with respect to the euro area.’

labour MP John Mann questioned the central bank boss over the impact of a Brexit on jobs, wages and prices in the UK. Mr Carney said the uncertainty surrounding the referendum could have an impact on household and business spending, while sharp falls in the value of the pound could push up inflation.

He also said some banks could quit the UK – while declining to name any. Mr Mann later tweeted: ‘Mark Carney reliant on fear factor alone to promote EU.’

Following the session, Culture Secretary John Whittingdale denied there would be an initial hit to the economy in the event of a vote to leave the EU. He also insisted the government should be preparing for both outcomes from the referendum, and urged senior figures to be careful about the language they used to describe risks.

Mr Whittingdale is a member of the Out campaign.