Carney: ‘Bank of England running out of options’ on economy

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The Government needs to take responsibility to improve the economy, according Bank of England governor Mark Carney.

The Times reports that Carney believes the BoE has no tools left to improve the UK’s future economic outlook.

In a Berlin speech on economic reform last night, Carney said politicians need to take tough decisions on economic policy and public spending.

He said: “Long-run prosperity was never in the gift of monetary policymakers.

“As the tenth anniversary of the start of the crisis approaches, a consensus is growing that escaping this low-growth low-inflation trap will require a rebalancing between monetary, fiscal and structural policies. The last are the most important.”

Carney backed investment in the speech, due to record low interest rates.

In August, Carney said the Bank had options to stimulate the economy that did not involve more base rate cuts.

At the press conference following the base rate cut to 0.25 per cent, Carney was repeatedly asked if interest rates could drop below zero.

He said: “I am not a fan of negative interest rates. We have other options to provide stimulus.

“We are not intending to move to negative interest rates. One would not want to see deposit rates go below zero.”