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No Deal Brexit is set to raise food and petrol prices and leave incomes lower in the UK, the Bank of England Governor has said.

Mark Carney doubled down today on his warning that crashing out of the EU could send the pound plunging even further.

Sterling is at already two-and-a-half-year lows - and today Mr Carney outlined how that would affect everyday goods.

He told BBC Radio 4's Today programme: "One would expect prices to go up. It is reasonable to expect, the markets are absolutely clear on this, that in the event of No Deal, the exchange rate would go down for a period of time.

"The area of the economy where that instantly translates into prices is on the forecourt of the petrol station, and in fruit and veg."

He also warned a "substantial number" of firms would find they were no longer competitive if there is a No Deal on October 31.

(Image: South Wales Echo)

Mr Carney, who ends his term as Bank governor in January, has been repeatedly attacked for his 'Project Fear' warnings by Leavers including Tory minister Jacob Rees-Mogg .

But asked if he was a "glumbucket" he said: "This is straight economics. This is very straightforward."

He said 90 days before the Brexit deadline, the government must "recognise" the challenges of crashing out without a deal.

"The challenge particularly in food is it's perishable, so you can't stockpile today for demand in November, and it is heavily heavily dependant on ports being open," he said.

He added: "The exchange rate adjusts to what is a real economic shock if the change in trading relationship means that real incomes will be lower here, relative to what they would otherwise have been, for a period of time.

(Image: WPA Pool)

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"That's not a comment about the longer term - it may take a while to get to the sunlit uplands...

"During this period of adjustment the exchange rate going down helps with adjustment. But it does have the consequence that things like food, petrol, other day to day items are more expensive."

The Bank of England Governor added: "The economics of no-deal are that the rules of the game for trade - exporting to Europe or importing from Europe - fundamentally change.

"There are some very big industries in this country where that which is highly profitable becomes not profitable, becomes uneconomic, and very difficult decisions will need to be taken.

"That has knock-on effects on the economy in the short term."

(Image: Simon Dawson/POOL/EPA-EFE/REX)

It came after the Prime Minister chaired his first exit strategy (XS) committee yesterday as the Government ramps up its planning for a no-deal Brexit.

He was slammed for setting aside £2.1billion funding for no-deal Brexit preparations - bringing the total spending on No Deal above the £6billion mark.

The Treasury has earmarked £344 million to spend preparing the UK Border for the chaos of a no-deal Brexit, including 500 extra Border Force officials.

And cash will be spent improving transport infrastructure around the Kent coast to deal with massive tailbacks at Dover.

The Government will spend a further £434 million to ensure the supply of vital medicines if trade routes break down.

And more than £100 million will be spent on an ad campaign to encourage Brits to prepare for the worst-case Brexit scenario.

Some £1.1 billion of the cash will be available immediately - with a further £1 billion available for Government departments to bid on as necessary.

Number 10 insiders now believe leaving without a deal is the most likely outcome, despite Boris Johnson saying publicly it was a “million to one” just days ago.

Shadow chancellor John McDonnell slammed the spending as an "appalling waste of tax-payers' cash".

He added: "All for the sake of Boris Johnson's drive towards a totally avoidable no-deal.

"This government could have ruled out no-deal and spent these billions on our schools, hospitals and people."