Bank of England leader calls for 'deeper relationship' with Europe

Jan. 26 (UPI) -- The leader of the Bank of England is recommending Britain strengthen its relationships with Europe after Brexit.

Mark Carney, the bank's governor, said in an interview with BBC Radio 4's Today program that the British economy, which is suffering a short-term a "Brexit effect," is "not doing as well as expected" prior to the referendum vote.

"What's happening in the U.K. is effectively the Brexit effect, in the short term, and I would underscore in the short-term, businesses in the U.K. -- whether they're in agriculture, whether they're in financial services, car manufacturing - are waiting to see what kind of relationship we will have with Europe and what kind of relationship we'll have with the rest of the world," Carney said.

Carney added that strengthening Britain's relationship with Europe would help the country's economic progress.

"The deeper the relationship with Europe, the deeper the relationship with the rest of the world... the better it's going to be over time for the U.K. economy," Carney said to BBC while in Davos, Switzerland, for the World Economic Forum.

Voting to leave the European Union is likely to cost Britain "tens of billions of pounds," with the economy losing 1 percent growth in 2017.

The International Monetary Fund upgraded its global growth figures for 2018 from 3.7 to 3.9 percent. In contrast, Britain is expected to grow 1.5 percent.

However, Carney said that greater clarity about Britain's future would bring back investing and strengthen trade relationships in a post-Brexit world.

"There's the prospect this year, as there's greater clarity about the relationship with Europe, and subsequently with the rest of the world, for a recoupling, if I can use that term borrowed from Gwyneth Paltrow, sort of 'conscious recoupling' of the . . . U.K. economy with the global economy," Carney said.