Brexit to blame for rising inflation, says former Bank of England governor

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Brexit is to blame for the soaring inflation driving the cost of living crisis in the UK, a former governor of the Bank of England has said.

Mark Carney, who pro-Brexit figures said should have been fired for warning about the economic dangers of leaving the EU prior to the vote, said he took no pleasure in being proven right because the resultant hardship had been placed on the backs of millions of ordinary people.

“We laid out in advance of Brexit that this will be a negative supply shock for a period of time and the consequence of that will be a weaker pound, higher inflation and weaker growth,” Carney said.

“And the central bank will need to lean against that. Now that’s exactly what’s happened. It’s happened in coincidence with other factors, but it is a unique aspect of the economic adjustment that’s going on here,” he told the Daily Telegraph.

“There’s no joy in saying, well, ‘we told you so’ because people are having to live with that reality.”

About a month before the referendum in 2016, the Bank of England – under Carney’s leadership – warned Britain could slide into recession if it voted to leave.

He rejected the claims of pro-Brexit figures including the Tory MP Jacob Rees-Mogg, who accused him of political bias and called for his removal for intervening, saying the Bank had a responsibility to the country to lay out the likely economic realities.

After the vote, as the UK negotiated its future relationship with the EU, the Telegraph labelled Carney’s further warnings about the dangers of a no-deal Brexit a “doomsday analysis”.

And it prominently featured the views of Rees-Mogg, who accused Carney of launching “project hysteria” – a play on the “project fear” jibe used by pro-Brexit figures during the referendum campaigning to rubbish warnings about the impact of leaving the EU.

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Speaking to the Telegraph, he described Brexiters as “a group of people who portrayed it as being something that was going to be seamless and positive and driving growth”. That, he said, contrasted with the more negative analysis of the Bank, adding that the negative predictions about Brexit had “proven to be the case”.

The former business secretary Andrea Leadsom told the paper: “I do not agree that inflation is caused by Brexit. Inflation is a massive problem around the world.

“The spikes in energy prices are a massive problem caused by Vladimir Putin’s invasion of Ukraine – it is not unique to the UK. You can certainly argue supply chains were broken by the Covid pandemic, and that made it harder following Brexit to recover. But to say this is all the fault of Brexit is just nonsense.”