Friday, 14 September 2018
Brexit: Carney warns no-deal could see house prices plunge per BBC News
The BBC have been headlining the possible 35% drop in house prices, per the Governor of the Bank of England. This report https://www.bbc.com/news/business-45516678 is still on the BBC business news front page.
It has been reduced in apocalyptic tone since this morning but still opens thus:
'The Bank of England's governor has warned the cabinet that a chaotic no-deal Brexit could crash house prices and send another financial shock through the economy.
Mark Carney met senior ministers on Thursday to discuss the risks of a disorderly exit from the EU.
His worst-case scenario was that house prices could fall as much as 35% over three years, a source told the BBC.
The warning echoes some of the Bank's previous comments.'
Read on and you find the truth about the story but that's not as in line with the Brexit will be disastrous narrative as the headlines:
Kamal Ahmed, economics editor
It appears that the Governor wasn't providing the Cabinet with a forecast of what the Bank believes would happen in the event of a no deal Brexit. He was briefing the Cabinet on what preparations the Bank was making if that does happen, including last November's stress test.
It was not a forecast.
It was an apocalyptic test where the Bank deliberately sets the parameters beyond what might reasonably be expected to occur. The major banks all passed the test, giving reassurance that the financial system can cope with whatever happens next year.
The Governor believes that a "no deal" scenario would be bad for the economy. But not as bad as the headlines today which are based on a doomsday scenario that is not actually forecast to happen.'
I wonder if the damage has been done and whether that's what Mark Carney and Phil Hammond wanted?