Brexit no longer poses the single biggest risk to the UK’s financial stability, Mark Carney finally admits

BREXIT no longer poses the single biggest risk to the UK’s financial stability, Bank of England governor Mark Carney finally admits.

He said Britain’s EU exit is in fact a greater threat to the financial stability of Europe than to our economy in a turnaround from his pre-referendum comments.

Asked by MPs on the Treasury Select Committee if he still agreed with his old comments he said: “Strictly speaking, the view of the committee is no.”

However, the Canadian said Britain faces global risks and the process of adaptation to life outside the EU has the potential to “amplify” those risks.

Mr Carney said: “In the run-up to the referendum we said it was the largest risk because there were a series of positions and possibilities in the financial sector, things that could have happened, that could have had financial stability consequences.

“So because we viewed it as the biggest domestic risk that was why the £250billion of capital was prepositioned with us. We would like to say this had some success.”

He added: “But having got through the night and the day after, the scale of the amount of the risks around Brexit has gone down to the UK, but the process can amplify.”

The Bank said in November the outlook for Britain’s financial stability following the Brexit vote “remains challenging” and is dependent on an orderly exit from the European Union.

Before the historic vote to leave Mr Carney said it would be “likely to have a negative impact in the short term” and said he thought it “would increase the risk of recession”.

He has since faced calls to stand down from his role after being accused pf peddling ‘Project Fear’ to try and keep Britain in the EU.

But today he said: “I am not saying there are not financial stability risks in the UK, and there are economic risks to the UK, but there are greater short term risks on the continent in the transition than there are in the UK.”

Asked whether Britain needs to thrash out a transitional deal for the financial services sector as soon as Article 50 is triggered, Mr Carney said it would be in the interest of both the UK and the EU.

He added: “It is the best mitigant to those (financial stability) risks, yes. It’s welcome.

“If there is not such a transition put in place, which in our view will have consequences, we will work to mitigate those consequences as much as possible.”