THE BANK of England’s governor Mark Carney warned senior ministers that a result of a no-deal Brexit could see house prices come crashing and send another financial shock through the economy.
The BBC source shared that Carney worst-case scenario was that house prices could fall as much as 35% over three years.
The Bank of England regularly carries out “stress tests” to check whether the banking system can withstand extreme financial shocks. Its latest one was conducted in November, when it said a 33% fall in house prices could occur in a worst-case scenario.
Several reports said that the Bank governor also told the Downing Street meeting that mortgage rates could spiral, the pound could fall and inflation would rise, and countless homeowners could be left in negative equity.
Speaking in Dublin, Mr Carney said the stress test was aimed at making sure the largest UK banks could continue to meet the needs of the country through “even through a disorderly Brexit, however unlikely that may be” .