“I think the possibility of a no deal is uncomfortably high at this point,” Carney said in an interview with BBC radio. “Parties should do all things to avoid it,” he added.
The British government has yet to agree the terms of its departure from the EU and has stepped up contingency planning. But economists say many companies are unprepared.
Edwin Morgan, Director of Policy at the Institute of Directors, said: “It’s getting quite late in the day to start looking at what those plans might be.”
Those in favour of Brexit accused Mr Carney of scare-mongering, arguing that if no deal is reached Britain would simply revert to trading under World Trade Organisation rules.
Most economists think that would cause serious harm to the world’s No.5 economy as trade with the EU, Britain’s largest market, would become subject to tariffs.