Carney warns growth may be weak for several years to come

Tim Wallace
Follow Tim
BRITAIN has not yet recovered from the full effects of the financial crisis, and may take several years to return to strong and sustainable economic growth, Bank of England governor Mark Carney warned yesterday.

Although economic growth in recent months has been higher than he expected, the forecast is not entirely positive, he said.

The hangover of high household and government debt still needs to be overcome, he told the House of Lords’ Economic Affairs Committee, adding that the UK’s banks are not yet fully fixed.

“The pickup in activity will bring some pickup in productivity but that will not fully sustain itself without a pickup in investment,” he said, sounding a note of caution.

In addition to domestic problems he also warned Britain faces weak export demand from Europe.

“The combination of all that could reduce the potential growth of this economy for some time. This is less likely to be a robust, sustained recovery,” Carney said.