‘Uncomfortably high risk of no-deal Brexit’

LONDON: Bank of England Governor Mark Carney said on Friday Britain faces an "uncomfortably high" risk of leaving the European Union with no deal, comments that drove sterling to an 11-day low against the dollar.

With less than eight months until Britain quits the EU, the government has yet to agree a divorce deal with Brussels and has stepped up planning for the possibility of leaving the bloc without any formal agreement.

"I think the possibility of a no deal is uncomfortably high at this point," Carney said in an interview with BBC radio.

"People will have things to worry about in a no deal Brexit, which is still a relatively unlikely possibility but it is a possibility.

"Sterling slid below $1.30 on the comments and touched a low of $1.2985, while British government bond prices rose.

If Britain fails to agree the terms of its divorce with the EU and leaves without even a transition agreement to smooth its exit, it would revert to trading under World Trade Organization rules in March 2019.Most economists think that would cause serious harm to the world´s No.

5 economy as trade with the EU, Britain´s largest market, would become subject to tariffs.

Supporters of Brexit say there may be some short-term pain for Britain´s $2.9 trillion economy, but that long-term it will prosper when cut free from the EU, which some of them cast as a failing German-dominated experiment in European integration.