UK businesses can’t fully prepare for the chaos of a no-deal Brexit, according to Bank of England Governor Mark Carney.
“There are a series of logistical issues that need to be solved, and it’s quite transparent that in many cases they’re not,” Carney said at the World Economic Forum in Davos. “There is a limited amount that many businesses can do to prepare if there are going to be substantial delays on the logistical side.”
While the risk of Britain leaving the European Union without a transition agreement may now be receding amid calls for a delay, there is still an impasse in Parliament that means the nation could yet crash out on March 29. Carney noted that business preparations under way can only go so far.
“If you’re a car plant that relies on, and there are ones in the UK, that rely on 40 eighteen-wheelers coming through Dover a day, and they have to show up within minutes of each other in order to meet the just-in-time requirements of the plant, look, you can’t stack things up all over Wales in order to ensure that you can continue to run it for months. That’s just a reality.”
Carney’s comments came on the day Airbus SE said it could be forced to move future investments out of the UK in case of a no-deal divorce from the EU, slamming the “madness” of Brexit supporters who assume the plane maker won’t abandon Britain.
He reiterated that the BoE has been preparing for Brexit since 2016, and has ensured the UK financial system is ready for any outcome. He also repeated that the central bank’s policy response to a no-deal Brexit wouldn’t be automatic — a hit to supply could push up prices and force it to hike rather than cut interest rates.