Carney: We are prepared to cut rates further if deflation takes hold

The Bank of England has said it is prepared to cut rates further and expand its quantitative easing programme should the current downward slide in inflation worsen materially.

Presenting the Bank's Inflation Report today, Governor Mark Carney said the Bank "has the will, means and responsibility" to take further measures, including changing the pace of rate increases, cutting the bank rate to zero and further QE if risks materialise. With UK CPI inflation having hit a 14-year low in December but the UK economy growing at a reasonable pace, the Governor pointed to two potential risks which could cause the Bank to act. Firstly, lower oil prices could provide greater stimulus to real incomes and demand. On the other hand, the risks of disappointing global grow...