Mervyn King blasts May's Brexit plan and BoE successor Carney

The prominent Brexit supporter, who headed the UK’s central bank from 2003 to 2013, wrote in a piece for Bloomberg that current negotiations for leaving the EU represented one of “three episodes in modern history when the British political class let down the rest of the country”, the others being the appeasement of Hitler’s Germany and the economic decline of the 1970s.

The lambasting of May's deal, which King labels a 'Betrayal of Britain', although he goes on to say that no "coherent" plan to deliver Brexit was ever presented, comes amid the start of five days of parliamentary debate on whether to accept or reject those terms.

King stated that the British people had been promised by then Prime Minister David Cameron and his Chancellor George Osborne “that Brexit meant leaving Europe’s single market and customs union”, and that this was the Brexit that both main political parties should seek to deliver.

He also branded the failure to plan, in the immediate aftermath of the referendum, for a ‘no deal’ scenario in which World Trade Organisation rules would have to be followed as “incompetence on a monumental scale.”

Despite the above, Lord King goes on to argue that: "Leaving the EU is not the end of the world, any more than it will deliver the promised land. Nonetheless the country is entitled to expect something better than a muddled commitment to perpetual subordination from which the U.K. cannot withdraw without the agreement of the EU.

"[...] If this deal is not abandoned, I believe that the U.K. will end up abrogating it unilaterally — regardless of the grave damage that would do to Britain’s reputation and standing. Vassal states do not go gently into that good night. They rage."

The comments also followed testimony to the Treasury Select Committee by King's successor at the helm of the Bank of England, Mark Carney, who said that leaving the EU without a deal could lead to a 10% increase in food prices if no plans are put in place at UK ports, which he said were not ready to adhere to WTO regulations for imports and exports with the EU.

Carney stated in November that the worst case scenario of a “disorderly no-deal” Brexit would see the UK’s economy contract by 8%, house prices fall by as much as 30% and interest rates jump to combat inflation.

Instead, Lord King backed Nobel Prize winning economist Paul Krugman, who has branded BoE estimates on the damage that could be caused by Brexit as “dubious”, alleging that many of the negative impacts anticipated by Bank cannot be modelled and therefore, according to him, should not be taken into account too much.

To back-up his argument, the well-known New York Times columnist cited past errors made in forecasts for emerging markets like Mexico.

Although in Krugman's opinion Brexit was a "mistake", he too criticised what he considered to be insufficient contingency planning for a hard Brexit.

"That said, it’s truly amazing that Britain finds itself in this position," Krugman wrote a few days before Lord King.

"If the downsides are anywhere close to what the BoE asserts, given the risk — which we’ve known for a long time was substantial — of a hard Brexit, it was an act of utter folly not to have put in backup capacity at the borders."