MPs call for fresh Brexit reports from Bank of England and Treasury

The Bank of England and Treasury have been asked by an influential committee of MPs to provide fresh analysis on the economic impact of Brexit scenarios including a cliff-edge withdrawal.

The Treasury Select Committee said it wants “up-to-date and rigorous analysis” of the current key Brexit outcomes to ensure Parliament is fully informed before making decisions on the UK’s EU withdrawal.

The cross-party committee of MPs has written to Bank Governor Mark Carney and Permanent Secretary of HM Treasury Sir Tom Scholar asking for the reports.

It comes as the Office for Budget Responsibility (OBR) separately published its report on the economic impact of the UK crashing out without a deal.

The UK’s fiscal watchdog predicted a no-deal Brexit would tip the UK into a year-long “full blown” recession by the end of the year and add £30 billion a year to government borrowing.

But experts said it was far more optimistic than the Bank’s doomsday no-deal Brexit report last November.

The Treasury Select Committee first asked the Treasury, the Bank and the Financial Conduct Authority to compile Brexit scenario analysis in June 2018 before the first Parliament voted on the agreement.

But after the reports were published in November last year, it concluded the Government’s economic analysis was “not fully sufficient to inform the vote in Parliament”.

Nicky Morgan, chairwoman of the Treasury Select Committee, said: “Economic analysis of the Withdrawal Agreement and Political Declaration that was produced at the Treasury Committee’s request will be almost a year old on the October 31 Brexit deadline.

“As the committee requested prior to the first meaningful vote, we have asked HM Treasury and the Bank of England to, where necessary, provide updated analysis of the economic impacts of the key scenarios for the UK’s future economic relationship with the EU.

“This will ensure that Parliament is as informed as possible as it considers key decisions about the future of our country.”

The Bank’s previous no-deal Brexit scenario report warned over a recession worse than the financial crisis, predicting the economy could shrink by 8%, a 25% crash in the pound and 30% fall in house prices.

It was widely criticised for also cautioning that interest rates could be hiked to 5.5% to calm soaring inflation from a plummeting pound, which the Bank has since rowed back on, stressing rates could go in either direction.