Mark Carney: Low oil prices are good for economic growth – in the medium term
Bank of England governor Mark Carney has said low oil prices are good for economic growth – for now.
Appearing before MPs at the Treasury Select Committee, Carney said it was "absolutely not true" that the Bank wanted to encourage higher oil prices, adding that lower prices were "good for growth in the medium term" and a "net positive for the global economy".
He added that the ability to affect prices of Opec, the oil cartel which represents 42 per cent of the world's oil production, had "diminished".
During the session, Carney added that he will give it to the end of this year to decide whether or not he wants to extend his term at the Bank of England beyond the five years he has already agreed.
He aid he will "need to make a determination by the end of the year" if he wants to stay on for another three years.
Carney reassured MPs, including Andrew Tyrie, that he will not follow Andrew Bailey to the Financial Conduct Authority (FCA), after the deputy chief of the Prudential Regulation Authority (PRA) was appointed chief executive of the FCA today.
He also took the opportunity, as is his wont, to point out that now is not the time for an interest rate rise.
"The UK is seeing a shift to a more normal risk environment [but]…. [we] need domestic cost growth," he said.
"Conditions for a rate rise are not yet in place."