By David Milliken
WASHINGTON (Reuters) - British politicians could now take some time to find a way forward on Brexit, Bank of England Governor Mark Carney said on Thursday, after Prime Minister Theresa May agreed a delay of up to six months before leaving the European Union.
May, under pressure from her Conservative Party, wants to find a way to leave the EU as soon as possible after losing three votes in parliament on her preferred exit plan and missing a long-planned departure date of March 29.
Britain had been at risk of a sudden, chaotic Brexit at 6 p.m. EDT (2200 GMT) on Friday if EU leaders meeting in Brussels had not approved early on Thursday a delay until Oct. 31.
Carney, in Washington for the spring meetings of central bankers and finance ministers at the International Monetary Fund and World Bank, welcomed the reduced risk of a chaotic no-deal Brexit, and said there was now a "window of time" to forge consensus.
"We will see how that time is used," he said at a trade policy forum hosted by the Association of Marshall Scholars.
"Right up until yesterday it could be argued that the UK had run out of time to forge that consensus. There are cross-party talks to try to find that, and that may take some time," he added.
On Tuesday, the IMF cut its 2019 growth forecast for Britain to 1.2 percent, bringing it in line with the BoE's own outlook and pointing to the weakest outturn since the world's fifth-largest economy was last in recession in 2009.
Carney said business uncertainty had been pushed "through the roof" by the prospect Britain could leave the EU without any temporary agreement to ensure exports did not suffer border delays or tariffs.
Much-needed investment had been put on hold since Britain voted to leave the EU in June 2016, damaging productivity and storing up economic problems for the future, he added.
"There is no spare capacity, monetary policy is accommodative and the labour market is incredibly tight. Everything says: 'Invest! Invest! Invest!' But there is this extreme uncertainty," he said.
Carney also warned that the world economy was suffering some of the same problems of slowing trade and investment, and an overreliance on consumer demand as a source of growth.
"Normally when expansions are reliant on the consumer, you start watching the clock, in terms of how much longer it will last."