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--Bank Of England To Publish Brexit Forecasts Soon
--But BOE Governor Will Avoid Putting Numbers On Scenarios In Committee
By David Robinson
     LONDON (MNI) - The Bank of England could deliver its full analyses of
different Brexit scenarios in the coming days, but Governor Mark Carney will
stop short of providing details when he appears with colleagues before
parliament's Treasury Committee Tuesday.
     Carney has promised to comply with Treasury committee chair Nicky Morgan's
request to provide its Brexit scenario analysis, but the Bank is reluctant to be
dragged into a political firestorm if numerical forecasts for the economic
impact of Brexit are seen to back either side of the contentious debate on the
     A Treasury committee official confirmed that they had not received the
analyses and were not now expecting them.
     Since the June 2016 Brexit vote, the MPC has adopted a convention of basing
its central growth and inflation forecasts on the assumption of a smooth
transition to an average of possible outcomes to the UK's negotiations on
departing the EU, excluding a cliff-edge no deal. This will no longer be
applicable once the shape of the final agreement is clear, and lawmakers on the
Treasury committee will inevitably grill Carney and his colleagues, Deputy
Governor Jon Cunliffe, Chief Economist Andy Haldane and MPC member Michael
Saunders, about the possible effects of leaving the trading bloc.
     This will be their first appearance since the publication on Nov. 14 of
Prime Minister Theresa May's draft agreement for withdrawal from the EU, centred
on temporary membership of a customs union. Carney will inevitably be prepared
to shed light on how the Bank sees the relative impact of a customs union
compared to no deal scenarios, but will likely steer away from putting numbers
on the various scenarios.
     He told Morgan in a letter that he would provide the details "after the
negotiations between the Government and [European] Commission have concluded,
but in good time before any Parliamentary vote."
     The European Council meeting to finalise and formalise the Brexit agreement
is scheduled for Nov. 25, and if things proceed as planned this would mark the
end of negotiations.
     When the UK parliament will first vote on the agreement is not yet known,
with speculation ranging from as early as Nov. 27 on to Dec. 10 and even out to
just ahead of the Dec. 20 Christmas recess. To ensure the committee has the
analysis "in good time" to inform an early vote the Bank will have to deliver it
in the coming days.
     As external economists start to base their forecasts on a customs union, no
deal or produce bifurcated projections for both options, depending on political
developments, the MPC will not want to lag too far behind and run the risk of
producing irrelevant projections that could cast doubt over its monetary policy
     In publishing scenario analysis for a no deal Brexit, which is explicitly
not the government's aim, the MPC will already be leaving itself open to charges
of overstepping its mandate - leaving Carney facing a delicate balancing act
when he gives evidence Tuesday.
     Other macro-forecasters have already taken a stab at estimating the impact
of no deal. The National Institute of Economic and Social Research latest
estimate is that UK growth in 2019 would be 1.9% in the case of a soft Brexit
but just 0.3% if EU membership ends next March in an orderly way but with no
deal and no transition period.
     Carney and his colleagues, however, will not want to make the headlines
with any similarly striking numbers. The Treasury Committee hearing starts at
10:00 GMT.
--MNI London Bureau; tel: +44 203-586-2223; email:
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