New Bank of England chief warns UK still 'in crisis'

WHAT DOES Mark Carney, the Canadian picked to run the Bank of England, think of the UK's economy? According to the Daily Telegraph, not much. Speaking at a fringe event at the International Monetary Fund's spring conference in Washington yesterday, Carney said Britain was still in "crisis", adding: "The US is breaking out of the pack of crisis economies that include the eurozone, the UK and Japan."

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Carney will be paid £800,000 a year in the hope he can boost Britain's growth when he becomes governor in July. But discussing the UK's economy yesterday, he said: "The growth numbers are certainly not particularly good." Carney, who currently heads the Bank of Canada, promised he would say more once he takes over from Sir Mervyn King at the BoE. He said "the flip side" of the UK's problems "is the tremendous opportunity that is there".

However, in comments that will disappoint Chancellor George Osborne, Carney argued that governments should not be looking to central banks to restore economies to prosperity. "Some people may be expecting central banks to do too much," he said. "If we want to talk about ultimate sources of growth, sustainable fiscal policy is a necessary condition. Sustainable growth comes from the private sector, not from the IMF, Bank of Canada or anyone else."

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Carney also praised America's central bank, the Federal Reserve, for signalling to the financial markets when it is thinking about raising interest rates, a policy he could adopt at the BoE.

Carney's comments come two days after the IMF warned Osborne was "playing with fire" with his austerity policies. The international economic body cut its growth forecast for the UK and called for more flexibility in Osborne's approach.