British Banks Told to Stockpile Cash

The pound fell against the dollar as Bank of England Governor Mark Carney warned that the possibility of a hard Brexit was now “uncomfortably high”. Speaking on the BBC’s Today program, the Canadian said he’d asked banks to stockpile cash, and be prepared for the possibility of a recession if Britain crashes out of Europe without agreeing a post-Brexit trade deal, BBC reported. He said as part of the Bank of England’s preparations they had asked banks to run stress tests to see if they could withstand the shock of house and commercial real estate prices decreasing by a third, interest rates going up by almost 4%, and unemployment increasing to 9%. Brexiteers attacked Carney, accusing him of being the “high priest of project fear”. During the interview, when Carney was asked if no deal would be a disaster, he told the BBC: “It is highly undesirable. Parties should do all things to avoid it.” Carney’s comments left the pound reeling, as it fell below the $1.30 mark for the first time in 11 months.