Bank of England accused of 'Project Fear narrative’ with Brexit obsession

The Bank of England
The Bank of England has been accused of maintaining an 'obsession' with Brexit - Yui Mok/PA

The Bank of England has been accused of maintaining an “obsession” with Brexit as it emerged it is continually asking business leaders to rate the level of “uncertainty” the 2016 referendum result is causing their firms.

A monthly survey issued by the Bank to some 10,000 chief executives and chief financial officers, and used to formulate monetary policy, continues to ask how much “the result of the EU referendum” has affected “the level of uncertainty affecting your business”.

No equivalent questions have been asked about factors such as the war in Ukraine and the impact of the Covid-19 pandemic, since 2022.

One member of the Bank’s so-called Decision Maker Panel, which completes a survey each month, said: “There are many, many things that cause uncertainty - the war in Ukraine, the Middle East, Covid, and yet Brexit is an ongoing obsession, it seems, within the Bank of England.”

The businessman, who asked to remain anonymous, said there appears to be a “concerted, anti-Brexit Project Fear narrative, a campaign within the Bank of England”.

He added: “If you are a small business trying to think about new regulations, new taxes, things that will have a material impact on your future then an incoming Labour government is a genuine concern. If this Bank of England exercise was honest and objective it would be asking questions about that.”

David Jones, the former Brexit minister said: “It is positively shocking that the Bank of England has still not come to terms with the outcome of a vote that took place almost eight years ago.

“The referendum was an exercise in democracy. As an important public body, the Bank should accept the vote and adapt to the new environment.

“A more interesting and useful exercise would be to ask business leaders for their views on the Bank’s failure to revise interest rates sooner and the regrettable impact that failure has had on inflation.”

‘Architect of Project Fear’

The Bank of England’s former governor, Mark Carney, was branded the “architect of Project Fear” after repeatedly claiming that the economic consequences of Brexit were all negative. He claimed unemployment would rise under anything except a “close” relationship with Brussels after Brexit. Recently, the Bank has come under fire from Conservative MPs for its part in failing to keep inflation under control.

The businessman suggested the possible answers to the Brexit question asked of CEOs and CFOs were weighted in favour of “uncertainty” given that the majority involve some level of uncertainty.

Of four possible answers, three correspond to different degrees of uncertainty, while one is that the referendum result is “not important”.

According to the most recent data, 1 per cent of respondents said that the 2016 referendum result was the “main source” of uncertainty for their business in January 2024, a drop from 26 per cent in August 2019, when Boris Johnson was prime minister, while 19 per cent said it was among their top three sources of uncertainty, a fall from 30 per cent in August 2019.

The proportion of business leaders saying that the 2016 result is now “not important” rose from 8 per cent in August 2019 to 31 per cent in January, according to data published earlier this month. Bank officials claim the data shows Brexit continues to be an important concern for a significant portion of businesses - justifying its repeated posing of the question.

A spokesman for the Bank of England said: “This survey was set up to help us better understand the impact of Brexit. The scope of the survey has widened significantly, and we have since asked business about the impact of a range of issues, including, for example Covid and the invasion of Ukraine. This survey is just one of many sources of information that feeds into decisions on monetary policy.”

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