James O'Brien 10am - 1pm
Brexit extension "sensible" for businesses says former Bank of England Governor
16 May 2020, 10:16
The former governor of the Bank of England suggested that a Brexit extension is more likely as the coronavirus crisis goes on.
Lord Mervyn King was speaking to Andrew Castle on topics ranging from the coronavirus crisis to how the UK could navigate Brexit. Andrew told Lord King that "we've six weeks to go until no deal" and wanted to know how the view of the former governor of the Bank of England on how the government could be operating their negotiations before no deal is triggered.
Lord King told Andrew "there is an alternative" to negotiations just falling apart, suggesting that both UK and EU negotiators could "reach an agreement that they won't have a free trade deal" and begin to work towards moving onto World Trade Organisation rules.
The former Bank of England governor told LBC that "it will require some practical preparation" and as businesses are preparing to reopen under social distancing guidelines, "it may be sensible to give businesses a bit more time" to prepare for a no deal Brexit, hinting at the possibility of an extension being the best option at this moment in time.
He acknowledged that "there is an understandable disagreement between the UK and the EU" but told Andrew he is confident that a solution can be met by the UK and EU negotiators.
Andrew started the conversation on no deal by simply asking the former governor of the Bank of England what was going on in the current negotiations. "One of the reasons for leaving the EU is to have regulations over our own economy" Lord King said. He said that the EU's position so far has been to have the UK stay within the EU's economic regulations if we are to have a free trade deal.
"The arguments put up by the EU don't make any sense" Lord King told LBC. He didn't see how there will be any break in the deadlock if the very reason the UK wanted to leave the EU couldn't be met then it will be difficult to find any solution.
He told Andrew "that will have to be resolved" before any further conversation around Brexit can be carried out, and that sacrifices may have to be made on both sides.
"Once that is resolved, it should be very easy to find a trade agreement" the former governor of the Bank of England insisted.