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

February 26, 2016 Share Print 0

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

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Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA

Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.