LONDON (Reuters) - Bank of England Governor Mark Carney said the BoE would only factor the possibility of a no-deal Brexit into its economic forecasts if Britain's next prime minister decides to leave the European Union without a transition agreement.
"In the event that the policy of the government were to switch, the forecast of the Bank of England would switch accordingly," Carney told lawmakers on Wednesday.
Last week, the BoE highlighted a disconnect between the "smooth" Brexit scenario that underpins its forecasts and the market pricing in a chaotic exit from the EU that would hurt Britain's economy and probably mean rate cuts.
Carney, speaking to parliament's Treasury Committee, said both candidates to be prime minister - former foreign minister Boris Johnson and the current incumbent Jeremy Hunt - had said they wanted to reach a deal with the EU if possible.
Carney repeated his view that the BoE was more likely to provide more stimulus for the economy in the event of a no-deal Brexit than to tighten monetary policy.
(Reporting by David Milliken and Andy Bruce; Writing by William Schomberg; Editing by Louise Heavens)
