Bank of England (BoE) governor Mark Carney needs to clarify whether house prices would be slashed by a third if the UK were to crash out of the EU, the Treasury select committee has urged.

Nicky Morgan has written to Carney requesting that he clear up exactly what he told the Cabinet on 13 September during a presentation on the risks of the UK leaving the EU without a trade deal.

According to the BBC, Carney reported he had told ministers that in a worst-case scenario house prices would fall by 33 per cent over three years.

However, it was later claimed the governor was setting out what the BoE was prepared for, rather than what it was forecasting.

In a letter to Carney, Morgan wrote: “I would be grateful for confirmation that what you set out to Cabinet was in fact the bank’s 2018 stress test scenario (which includes a 33 per cent fall in residential property prices as one of its parameters), which in turn is being used to draw inferences about the bank’s preparedness for ‘no deal’.”

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