Pound falls after Carney says risk of no deal Brexit ‘uncomfortably high’

Bank
of England Governor Mark Carney.
Hannelore Foerster/Getty

• The pound dropped below 1.30 against the dollar on
  Friday morning.
• The fall came after Bank of England Governor Mark
  Carney said there was an “uncomfortably high” chance that
  Britain will leave the EU without a deal.
• The Bank of England ran an economic simulation of what
  might happen after a no deal Brexit. It suggested the UK would
  fall into a recession and interest rates and unemployment would
  soar.
• 
  You
  can track the pound’s movements live at Markets
  Insider.
  

LONDON — The pound
fell below $1.30 against the dollar on Friday morning after Bank
of England Governor Mark Carney said there was an “uncomfortably
high” chance that Britain will leave the EU without a deal.

“The possibility of a no deal at the moment is uncomfortably
high. It is highly undesirable, parties should do all things to
avoid it,” Carney said during an interview on BBC Radio 4’s Today
Programme.

During the interview, Carney also cited the scenario from the
Bank of England’s last stress test — the annual test to make sure
Britain’s banks could handle a financial crisis and economic
downturn — which suggested that in a no deal scenario, the UK
could fall into a recession and see unemployment more than double
to 9%.

The pound dropped significantly against both the dollar and the
euro in response. Just after 8.40 a.m. BST (3.40 a.m. ET), the
pound was trading at $1.2993, a fall of close to 0.2% on the day.

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