Brexit negotiations not going ‘in the way we might hope’ says former Bank of England governor Mervyn King

'I don't think this is a statement about the potential impact of Brexit but I don't think that the negotiations are going in the way that we might hope'

Mervyn King, the former Bank of England governor, has said the Brexit negotiations are not “going in the way we might hope” as he urged Theresa May to better prepared for a “no deal” scenario.

The former governor called for a “separate team” to be formed in Whitehall preparing for the possible scenario of Britain leaving the bloc in March 2019 without agreeing new trading arrangements.

Ms May and her Cabinet colleagues have repeatedly threatened to walk away from negotiations if the offer from Brussels is deemed to be unacceptable.

But earlier this year David Davis, the Brexit Secretary, admitted no impact assessment had been undertaken by the current administration, probing the potential effects to the economy of a “no deal” scenario.

Lord King, who was the bank’s chief between 2003 and 2013 and through the financial crash, told BBC Newsnight: “If you’re going to enter a negotiation, it’s actually very important to make sure that the other side of the table knows that you have a fallback position that you’re capable of delivering.

“That requires you to make clear publicly what the fallback position is,” he said.

Lord King said that the country has been waiting “over a year now” for such a position, adding: “I must say that I’m not terribly impressed by how much of that fallback position has actually been stated, been implemented, and whether it’s actually being managed properly within the civil service and the Government.

“I don't think this is a statement about the potential impact of Brexit but I don't think that the negotiations are going in the way that we might hope.

”And I think that you need a separate team who are responsible for ensuring that if the negotiations do break down in some way, and we cannot control that, that depends on the other side. We have no influence over that.

“Then what we are capable of doing is saying, well if you don't want an agreement then we are capable of leaving and trading with you, for example under World Trade Organisation terms. It's not our first preference but we can do it, and we need a team of people who are capable of delivering that.”

Lord King’s comments came as inventor Sir James Dyson, who backed the leave campaign during the European Union referendum last year, said not enough progress had been made in the negotiations but said Britain had put forward “positive suggestions” that had “not been reciprocated” by the bloc.

“I suspect that we will have to leave without a deal and we will trade under WTO regulations, which frankly, are going to hurt the Europeans more than the British,” he told BBC Radio 4’s Today programme.

“Business is about uncertainty and I think uncertainty is an opportunity and the opportunity here is that the rest of the world is growing at a far greater rate than Europe,” he added