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Bank of England: economy to face worst year since financial crisis
Britain is on course for its worst financial year since the 2008 financial crisis, the Bank of England has warned.
In its quarterly health check, the Bank has cut its growth forecast for the economy in 2019 from 1.7% to 1.2%, placing the blame on a slowing global economy, as well as Brexit uncertainty. The report adds that there is currently a 25% chance of a recession this year.
Speaking on Thursday, Bank of England governor Mark Carney said: “The fog of Brexit is causing short-term volatility in the economic data and, more fundamentally, it’s creating a series of tensions.”
Rain Newton-Smith, the chief economist at the CBI, the business lobby group, said: “It’s now crunch time – a no-deal scenario must be taken off the table because the economy is seizing up from uncertainty.
“The Bank’s forecasts, when put together with recent business surveys, illustrate the harmful impact on the economy the longer that this goes on.”
May returns from Brussels empty handed, though talks have restarted
Theresa May returned from her talks with EU leaders on Thursday empty handed, with EU chiefs telling the prime minister that the Irish backstop was not open for renegotiation.
EU commision president Jean-Claude Juncker told May that the withdrawal agreement could not be reopened, saying it was “a carefully balanced compromise between the European Union and the UK, in which both sides have made significant concessions to arrive at a deal”.
Despite this, UK and EU leaders have issued a joint statement saying that they will be holding talks to find “a way through” the deadlock in Westminster, adding that Juncker will meet May again before the end of the month.
May is due to meet Irish PM Leo Varadkar in Dublin today, where she will seek support for making changes. However, Irish leaders have already rejected the idea of negotiating directly with the UK.
Labour denies second vote is party’s next move if May rejects Corbyn’s letter
Labour has denied that a push for a second referendum is its next move, if Theresa May rejects Jeremy Corbyn’s proposal for a revised Brexit deal.
The party’s shadow Brexit minister, Matthew Pennycook, tweeted on Thursday that if May did not accept Labour’s changes “in full”, the party would move to support a second referendum.
Labour sources have denied that pushing for a fresh vote is the party’s official position, but said that the option was still on the table.
We’ve now set out in detail the changes needed to secure @UKLabour support for a deal. Either May accepts them in full and commits to enshrining them in law before exit day or we must move to support a public vote. No other credible options left to prevent a 'no deal' #Brexit. pic.twitter.com/Plz48AQ3Vv
— Matthew Pennycook (@mtpennycook) February 7, 2019
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