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Bank of England’s Carney Backs PM Cameron’s E.U. Deal

Bank of England Governor Mark Carney Presents The Quarterly Inflation Report At A News ConferenceBank of England Governor Mark Carney Presents The Quarterly Inflation Report At A News Conference
Bank of England Governor Mark Carney, the pound's 'unreliable boyfriend.'Photograph by Bloomberg Bloomberg via Getty Images

Bank of England Governor Mark Carney on Tuesday backed Prime Minister David Cameron’s European Union deal ahead of a June referendum on membership, saying the agreement allowed the central bank to do its job.

While Carney said he was not making any recommendation about how to vote in the June 23 referendum, he gave a positive assessment of reform promises that Cameron extracted E.U. leaders ahead of the referendum.

 

“The settlement addresses the issues the Bank identified as being important, given the likely need for further integration of the euro area, to maintaining its ability to achieve its objectives,” Carney said in a letter to British lawmakers.

The letter, dated March 7, said the deal sealed in February recognized Britain’s need to supervise its banking sector and that some countries, such as Britain, would remain outside the E.U.’s banking union and its more uniform rules.

Carney also noted commitments by the bloc’s member states to improve the competitiveness of the E.U. economy which could help economic growth in Britain.

Under questioning by lawmakers, Carney was criticized by one euroskeptic member of Cameron’s party for a BoE report published in October which gave a positive assessment of Britain’s membership of the E.U..

Jacob Rees-Mogg, a Conservative member of parliament campaigning for a vote to leave the E.U., said it was “beneath the dignity” of the BoE to make “speculative” comments about the benefits of E.U. membership.

On Monday, the BoE had announced it would hold three extra auctions of long-term liquidity for banks “in the weeks around the E.U. referendum” on June 23 to ensure that banks have enough liquidity to cope with any volatility. Many political and business leaders have warned that a vote to leave would damage the U.K.’s economy and particularly the City of London, which depends to a large extent on free and full access to Europe’s single market.