Mark Carney said that contingency plans put in place would reduce the damage to the economy

A disorderly no-deal Brexit would be only half as damaging as the Bank of England warned three months ago, Mark Carney has said.

In November the Bank said that after three years the economy would be between 4.75 per cent and 7.75 per cent smaller than under the prime minister’s plan if there was a hard Brexit.

Mr Carney, the Bank’s governor, told peers yesterday that contingency plans put in place would reduce the damage by 2 percentage points in the “disruptive” model or 3.5 percentage points in the worse “disorderly” one. Both scenarios assumed that there would be significant border frictions, a market crash and a sterling collapse on March 29.

The new estimates mean that the cost of no deal might be as