BoE's Carney: Oil decline positive for UK economy

Mark Carney

Bank of England Governor Mark Carney said on Wednesday that the sharp fall in global oil prices was positive for British economic growth, repeating remarks made last month.

"My personal view is that the net impact of the decline in the oil price at this stage is net positive for growth in the United Kingdom," Carney told a panel of lawmakers.

While falling oil prices were a negative shock for the economy in Scotland, home to most of Britain's North Sea oil and gas industry, this would be "substantially mitigated" by the country's fiscal arrangements with the rest of the United Kingdom, Carney said.

Carney said in December that the fall in oil prices was unambiguously positive for Britain's economy and since then prices have fallen further.

Speaking on the inflation in Europe, the governor said he expects the European Central Bank will take measures to meet its inflation target of close to 2 percent.

"The intention of the ECB, of President (Mario) Draghi and his colleagues to fulfil their mandate is clear," Carney told lawmakers.

"It is in our interest, without question, that (the euro zone has) stable and predictable inflation consistent with (the ECB's) mandate, and we have every reason to expect them to take the measures to do so."

Euro zone inflation turned negative in December for the first time since 2009, fueling expectations that the ECB will soon announce a plan to start purchasing government bonds.

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