London Daily

Focus on the big picture.
Monday, Jul 20, 2026

Brexit adding to cost-of-living crisis, Mark Carney says

Brexit adding to cost-of-living crisis, Mark Carney says

Brexit has added to the UK's economic woes by lowering the value of the pound and contributing to price rises, an ex-Bank of England governor has said.

Mark Carney told the BBC the fall in the pound and shrinking economy after the UK left the EU had added to "inflationary pressure".

No 10 says soaring prices are being driven by Covid and the Ukraine war.

On Thursday, the Bank warned the UK was facing its longest recession since records began.

In an attempt to cool rising prices it raised interest rates from 2.25% to 3% - the biggest jump since 1989.

A recession is defined as when a country's economy shrinks for two three-month periods - or quarters - in a row.

Inflation - the rate at which prices rise - is at the highest level for 40 years.

The invasion of Ukraine has driven up the price of food and energy, as supplies are disrupted by the war and the West tries to phase out Russian oil and gas.

However, Mr Carney, who was governor of the Bank of England between 2013 and 2020, said Brexit was also helping to fuel inflation and had "slowed the pace at which the economy can grow".

He told BBC Radio 4's Today programme the pound had fallen "sharply" against other currencies after the Brexit referendum in 2016 and "hasn't recovered".

"If I can actually cast your mind back to a few years ago, this is what we said was going to happen, which is that the exchange rate would go down, it would stay down, that would add to inflationary pressure," he said.

"The economy's capacity would go down for a period of time because of Brexit, that would add to inflationary pressure, and we would have a situation - which is the situation we have today - where the Bank of England has to raise interest rates despite the fact that the economy is going into recession."

He added that the UK had experienced "a big hit to our productivity" and "we have to take some tough decisions in order to get it back up".


But Downing Street blamed the impact of the Covid pandemic and the war in Ukraine for the problems in the UK economy.

The prime minister's official spokesman said: "What we are seeing is challenges caused by the pandemic and by war in Europe which have been driving factors in terms of inflation, and we're seeing high inflation in a number of countries around the world."

Asked if he was denying Brexit had caused financial issues, he said: "Our focus is on ensuring we have stability and fiscal credibility. That's what the chancellor and the prime minister are focused on rather than on a decision taken a number of years ago where people made a clear decision."

A fall in the value of the pound makes goods and services which are imported from overseas more expensive, while making exports more competitive.

In September the pound fell to a record low against the dollar, after then-Chancellor Kwasi Kwarteng announced sweeping tax cuts without saying how they would be paid for.

It has since recovered to the level it was at before the so-called mini-budget, after new Chancellor Jeremy Hunt reversed almost all the planned tax cuts.

Newsletter

Related Articles

0:00
0:00
Close
Brilliant move: Péter Magyar Moves to Nominate Chess Grandmaster Judit Polgár as Hungary’s President
Spain Defeats Argentina in Extra Time to Win Second World Cup
Current AI Seeks to Build an Open Global AI Infrastructure Outside Big Tech Control
Turkey Explores S-400 Transfer to UAE in Bid to Rejoin F-35 Program
Germany’s Economic Malaise Reopens the Sunday Shopping Debate
Singapore Considers Lower Taxes for Fund Managers as Hong Kong Intensifies Talent Contest
US Retaliates Against Iran After Two American Troops Killed in Jordan
Bank of Asia BVI Enters Court-Supervised Liquidation After Regulators Find It Insolvent
Proposed U.S.-Saudi Nuclear Pact Could Permit Limited Uranium Enrichment Under International Safeguards
Netherlands Declares Water Shortage Emergency After Drought Pushes Rivers to Historic Lows
Why Kentucky Fried Chicken Became KFC—and Why the False Explanations Persist
Iran Claims It Destroyed Bahrain’s Main Artificial Intelligence Center in Missile and Drone Strike
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
Brothers Andrew and Tristan Tate Who Turned "Toxic Masculinity" Into a Brand Arrested in Miami as Britain Seeks Their Extradition
Reported CIA Mission Helped Clear the UAE’s Path to Advanced US AI Chips
Artificial Intelligence Capital Fuels Markets While Governments and Regulators Face Mounting Strategic Tests
China’s Moonshot’s Kimi K3 Narrows the Gap With Anthropic Through Scale, Openness and Lower Cost
Gold and Cash Seizure Puts Indonesia’s Senior Anti-Corruption Prosecutor Under Investigation
The Ledger Will Not Trust on Faith
Bank of England Warns Climate Shocks Could Trigger Sudden Asset Repricing
UK Treasury Places Microsoft, Google, AWS and Oracle Under New Financial Resilience Rules
Scottish Government Faces Pressure Over Delays in Vulnerable Group Background Checks
Crown Prosecution Service Authorises Additional Charges Against Andrew and Tristan Tate
NHS Approves At-Home Cancer Treatments for Rare Blood Disorders
Bank of England Gains Oversight of Major Cloud Providers Supporting UK Financial System
UK Government Plans Major Overhaul of English Local Councils Through New Unitary Authorities
British Steel Nationalisation Dispute Escalates as Chinese Owner Jingye Seeks Compensation
Bank of England Signals Interest Rates Will Stay High as It Warns of Financial Risks From Climate and AI
Trump Administration Pressures Banks to Restrict Financial Access for Undocumented Immigrants
Passenger Bound for Germany Refused to Sit Beside a Woman on a Plane — Then Slapped a Flight Attendant
Ukraine’s Leadership Rift Spills Into the Streets as Protesters Target Army Chief
Ukrainian Drone Barrage Kills Eight and Strikes Russian Logistics Network
Key Trends to Watch
Financial Conduct Authority Warns Cloud and Digital Risks Are Becoming a Financial Priority
Jeffrey Donaldson Appeals Sexual Abuse Conviction as Democratic Unionist Party Opens Review
Welsh Health Authorities Launch Emergency Meningitis Vaccination Programme for Students
Scottish Business Activity Falls for Third Month as Companies Face Rising Costs
Bank of England Regulators Demand Better Access to Digital Banking Services
United Kingdom Cuts Bilateral Aid to Several African Countries by Up to Ninety Per Cent
United Kingdom Introduces Tougher Deportation Rules After Rochdale Exploitation Scandal
NHS England Launches Wearable Technology Plan to Reduce Sepsis Deaths
Amazon Web Services Billing Error Sends Trillion-Dollar Invoices to British Companies
Bank of England Takes Direct Regulatory Role Over Major Global Cloud Providers
Extreme Summer Heat Drives Record Fire Risk and Rising Deaths Across Britain
United Kingdom Nationalisation of British Steel Sparks Diplomatic Dispute With China
United Kingdom Economy Shows Weak Growth Ahead of Major Autumn Budget
Andy Burnham Set to Become United Kingdom Prime Minister After Labour Leadership Victory
The Ten World Cup Finals That Defined Football History
Smartphones Are Getting More Expensive, Sales Are Collapsing, and Even Apple Admits: "Prices Will Rise"
The Monaco Bombing Has Become a Test of Ukraine’s Intelligence Accountability
×