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Brexit could make UK better off, says ex-Bank of England governor Mervyn King

Wolverhampton | News | Published:

Former Bank of England governor Mervyn King has said that Brexit could help the UK economy thrive, as he accused Remain campaigners of 'insulting the intelligence' of voters with downcast predictions.

Lord King, who went to school in Wolverhampton, said that many forecasts made by the failed Remain campaign had been 'speculative'.

He argued that the fall in the value of the pound since the UK voted to leave the EU could 'rebalance' the economy and help the country grow. His comments come in contrast to the view of his successor, Mark Carney, who prior to the referendum warned that Brexit could lead to recession.

Lord King, who was governor of the Bank of England between 2003 and 2013, said the economy had been facing problems before the June referendum. He said: "The UK economy has to be rebalanced one way or another, Remain or Leave. We need a level of the exchange rate much closer to the level we had in the middle of 2013. We are now in a better position to rebalance the UK economy."

Before the referendum, research published by the Bank of England, the Treasury and a number of universities said Brexit would lead to productivity slowing.Treasury forecasts warned the country would slip into recession, although recent economic data on manufacturing, employment and consumer spending indicates the impact has been less severe than expected in the aftermath of the vote.

Mr King, who stayed neutral during the EU referendum campaign, said: "An unfortunate aspect of the campaign was the government forecasts of what the consequences of Brexit might be, which inevitably were highly speculative, in particular for the long run.

"The problem is that the long-run judgment then feeds back to the short-run forecast because it was assumed that people would anticipate the long-run."

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