Bank of England confirms EU exit research after email misfire

[May 23, 2015]  By William Schomberg
 
 LONDON (Reuters) - The Bank of England plans to assess the implications of a possible British exit from the European Union, it said in a statement, confirming an email it inadvertently sent to a newspaper about the supposedly confidential research project.

The Guardian reported that an aide to a senior Bank official said in the email the project should be kept secret from most BoE staff and any journalists asking about it should be told the Bank was looking at a broad range of European economic issues.

British Prime Minister David Cameron, who was re-elected on May 7, has pledged to reshape Britain's ties with the EU before holding an in-out membership referendum by the end of 2017.

As with last year's referendum on Scottish independence, the BoE is keen to avoid any suggestion it is entering a political debate.

In a statement on Friday evening, the Bank confirmed its intention to launch the assessment.

"It should not come as a surprise that the Bank is undertaking such work about a stated government policy," it said in the statement posted on its website.

"There are a range of economic and financial issues that arise in the context of the renegotiation and national referendum. It is one of the Bank’s responsibilities to assess those that relate to its objectives."

Many British business leaders are worried about the possibility of losing access to their main export markets and there are also concerns about the impact on Britain's financial services industry.

Deutsche Bank, the euro zone's second-largest bank by assets with large operations in Britain, said on May 19 it had begun initial preparations for a possible British exit from the EU.

The BoE said it would not talk about its assessment in advance but would disclose details "at the appropriate time", adding it had taken a similar approach when it considered the implications of last year's Scottish referendum.

"While it is unfortunate that this information has entered the public domain in this way, the Bank will maintain this approach," the statement said.

Chris Leslie, finance spokesman for the main opposition Labour party, said it was crucial Britons were given a full analysis of the facts, with "no hidden agendas".

"We now need to know whether the Bank of England report will be published in time for everyone to consider the facts before a referendum," he said, adding the Bank should provide a clear timetable and identify the people involved in the project.

The Guardian said the email was written by the private secretary of Jon Cunliffe, a deputy governor responsible for considering potential risks to the economy from the banking and financial services sector. It was mistakenly sent to the Guardian by a member of the Bank's press office.

A Bank spokesman declined to comment further on the report.

(Writing by William Schomberg, Additional reporting by Li-mei Hoang; Editing by Mark Potter)

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