The UK needs a “credible fallback” in case no EU trade deal is reached during Brexit negotiations, former Bank of England governor Mervyn King has said.
Lord King said British negotiators needed to show Brussels the country has an alternative over a bad trade deal post-Brexit.
The former governor, who served between 2003 and 2013, said no deal was “not the first preference of anybody”.
He said the government “probably wasted a year” on its contingency plans.
Speaking to BBC Radio 4’s Today programme, the banker said: “We are where we are, and we are in a negotiation and it’s important that the negotiation succeeds.
“But it cannot succeed without a credible fallback position and that is something which I think is a practical thing that the civil service ought to be taking a lead on.”
Previously Prime Minister Theresa May has said: “No deal is better than a bad deal.”
If the UK left the EU without a trade deal with the 27 other nations it would rely on World Trade Organisation rules, and trade agreements between Europe and other countries may not be available to Britain.