Bank of England governor Mark Carney has urged the new government of the United Kingdom to keep its promise of a referendum on European Union (EU) membership. According to Carney Prime Minister David Cameron should hurry up because “uncertainty is affecting business confidence.”
David Cameron had promised the British People a “simple referendum of in or out” of the EU immediately after the election. The legislation is ready but the anticipated referendum date is 2017. However, Carney believes that date is too far away and will negatively impact business.
"The government has made it clear that [the referendum] is a priority. I am sure the government will act with appropriate speed in developing the negotiations ... as soon as necessary," Carney said on Radio 4.
“It’s in the interests of everybody that there is clarity about the process and the question and the decision" he added.
No business has yet been shown to have been scared away from investment in the UK but Carney says the “EU is the largest investor in the United Kingdom (UK)” and ambiguity will denigrate foreign investment.
Carney talked about his meetings with various CEO’s and their “awareness” of political uncertainty in the UK and in Europe.
"What they've been telling us, and we see it in the statistics, is they have not yet acted on that uncertainty - or to put it another way, they are continuing to invest, they are continuing to hire."
The Bank of England boss also discussed the inefficient productivity levels apparent in Britain. Carney said he did not believe immigration from the EU had a dramatic role in the loss of productivity but the relatively old age of the workforce did.
"In the course of the last two years the number of older workers in their fifties or sixties that have stayed in the labour market is around 300,000 more and people want to work more hours, so we have another 200,000 to 300,000 more workers."
"When you compare that to the increase in net migration, the first two numbers add up to more than 500,000, while the increase in net migration is 50,000."