Brexit legal challenge: Mark Carney says the ruling adds to the uncertainty that defines post-Brexit Britain

The High Court has ruled that the Government does not have power to trigger Article 50 without parliamentary approval and a vote from MPs

Bank of England governor Mark Carney said the high court ruling on Brexit was “one of the examples” of the uncertainty that are overshadowing the UK economy.

The High Court on Tuesday has ruled that the Government does not have power to trigger Article 50 without parliamentary approval and a vote from MPs.

Carney said the ruling is an example of the uncertainty that will “characterise the Brexit process”.

"The negotiations haven’t even begun. There will be volatility as those negotiations proceed. I see it as one of the examples of that uncertainty," the governor said.

He later added: "We expect a spike in uncertainty around the triggering but the level of uncertainty doesn’t tail away during negotiation period."

“Those effects will be there in the economy and what monetary policy is trying to do is lean against and support the economy during this time.”

Judgment: R (Miller) -V- Secretary of State for Exiting the European Union

 

Judgment: R (Miller) -V- Secretary of State for Exiting the European Union

His comment came as the Bank of England announced its latest monetary policy decision.

In its latest round of forecasts the Bank projects consumer price inflation rising to 2.7 per cent in the final quarter of 2017, up from 2 per cent in its August forecasts. It still sees inflation at 2.5 per cent in 2019.

This is the biggest overshoot over three years relative to the Bank’s official 2 per cent target the MPC has ever projected in an Inflation Report.

As widely expected, the 9-person Monetary Policy Committee voted unanimously to keep interest rates on hold at 0.25 per cent.

The Bank of England decision to leave interest rate unchanged sent the pound to a three-week high against the dollar.

It received an earlier boost from the Supreme Court ruling allowing MPs to vote on the triggering of Article 50

Sterling was trading above the $1.24 against the dollar. In the immediate release of the central bank's decision on monetary policy it surged to an intraday high of $1.2493.

Most economists agree that uncertainty looks set to reign as the Government mounts an appeal against the decision.

Neil Wilson of ETX Capital said the decision would “underpin sterling for some time”, adding, “we could see this create a floor under the pound around $1.25. Politics and uncertainty continue to drive the currency markets,” he said.

Economists have previously warned sterling is likely to plunge to a new record low once Prime Minister Theresa May starts the official proceeding to leave the EU.

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