Bank of England’s Carney Warns of Zero-Sum Game from Negative Rates

Bank of England Governor Mark Carney warned on Friday that moves by central banks to cut interest rates below zero risked creating a “beggar-thy-neighbour” environment which could leave the global economy trapped in low growth.

In a speech to be delivered at a meeting of Group of 20 finance ministers and central bank chiefs in Shanghai, Carney also blamed the recent global slump in shares and other asset prices on the failure of governments to make bold reforms of their economies.

“The global economy risks becoming trapped in a low-growth, low-inflation, low-interest rate equilibrium,” he said in the speech which suggested governments might consider boosting demand by raising their own borrowing and spending.

Reuters

Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.