Central banks have less ammunition to fight deep downturn, warns Mark Carney

Mark Carney, governor of the Bank of England, has said that central banks might struggle “if there were to be a deeper downturn”.The outgoing governor told the Financial Times that the global economy is heading towards a “liquidity trap” that would undermine central banks’ efforts to avoid a future recession. A global liquidity trap occurs when central banks lose all effectiveness to manage the economy because demand is weak and looser policy does not encourage any additional spending.

Source: The Telegraph
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