The Bank of England updates analysis on the potential impact of a no-deal Brexit on the economy as Mark Carney goes before MPs.
he negative impact of a no deal Brexit will not be as severe as originally predicted by because of improved planning by government, business and the financial sector, the Bank of England has said.
Governor Mark Carney told the Treasury Select Committee the bank now believes GDP will fall by 5.5% in the worst-case scenario following a no-deal Brexit, less than the 8% contraction it predicted last November.
The bank's revised assessment also says unemployment could increase by 7% and inflation may peak at 5.25% if the UK leaves the European Union without a deal.
The Bank has updated its analysis of the potential impact of a no-deal Brexit on jobs and prices While he warned that there would still be an economic impact, with food bills likely to rise, Mr Carney said preparations for no deal undertaken since the end of last year had informed the improved picture.
These include work undertaken at Dover and Calais to reduce disruption to cross-Channel trade, the government's proposed tariff regime and work to reduce disruption in the financial markets.
In a letter to the committee Mr Carney said: "Advancements In preparations for a No Deal No Transition scenario mean that the Bank's assessment of a worst case No Deal No Transition scenarios has become less severe."