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.
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