The immediate risk posed by Brexit to the UK economy has declined, the governor of the Bank of England has told MPs.
Mark Carney said that action by the Bank before and after the vote to leave the European Union had reduced the danger to the country’s financial stability.
He added, however, that the overall level of risk was still “elevated”.
The risk was greater for continental Europe than for the UK, he said.
The governor also told members of the Treasury Select Committee that a period of transition was “highly advisable”.
“If there is not such a transition put in place, in our view it will have consequences. We will work to mitigate those consequences as much as possible,” he said.
Mr Carney said that the UK should concentrate on stable access to financial markets after Brexit. The financial services industry could suffer “outsize” consequences from losing only some of its access.
In the face of questions from Conservative MP Jacob Rees-Mogg, he insisted the bank had identified the risk to the financial sector from the Brexit vote “correctly”.
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