Britain needs a Brexit backup, warns former Bank of England chief

Former Bank of England chief Mervyn King told the BBC Today show that the UK needs a ‘credible fallback’ in case no EU trade deal is reached during Brexit negotiations. (Reuters)

LONDON: Former Bank of England chief Mervyn King on Saturday warned that the UK needs a “credible fallback” in case no EU trade deal is reached during Brexit negotiations.
Lord King, who served as Bank of England governor for a decade, which included the 2008 global financial crisis, said that “no deal” was not the first preference of anybody.
He also admitted he did not know what the economic consequences of Britain’s decision to leave the European Union (EU) would be.
Speaking to the BBC Today program, the banker said: “We are where we are, and we are in a negotiation and it’s important that the negotiation succeeds.
“But it cannot succeed without a credible fallback position and that is something which I think is a practical thing that the civil service ought to be taking a lead on.”
Prime Minister Theresa May has long argued that “no deal is better than a bad deal”, the key phrase repeated by her since outlining her Brexit blueprint in January.
That would mean Britain relying on World Trade Organization rules in its trading with its former partners in Europe.
As Britain begins the arduous task of negotiating a favorable trading relationship with the EU it has simultaneously embarked on a trade offensive beyond the bloc — including the Gulf states which a number of senior ministers have visited over the last year.
“It’s a do-able proposition if we start now. We’ve probably wasted a year but we need to be much further along the road to making that a credible fallback position,” Lord King told the program.