Canadian bank warns over US recovery
Friday 1 October 2010 - by Will Henley
Mark Carney, governor of the Bank of Canada, has voiced concerns at signs of â€śrenewed weaknessâ€ť in the US economy, warning that poor labour, housing and manufacturing figures south of the border would present challenges for Canada.
â€śWith risks of a renewed US slowdown, with constraints beginning to bind growth in emerging economies, and with domestic considerations that will slow consumption and housing activity in Canada, any further reduction in monetary policy stimulus would need to be carefully considered.â€ť
Carney's speech comes as the International Labour Organisation (ILO) warns that global employment is unlikely to recover until 2015.
Carney added that the Bank of Canada was working with other major central banks to create a â€śmore flexible, open international monetary systemâ€ť.
Worldwide recovery depends upon a major rebalancing of supply and demand, he continued. â€śThe easy bit is now over. In advanced economies, the temporary boost from the turn in the inventory cycle is largely complete. In many countries, fiscal stimulus is turning to fiscal drag. The panicked postponement of consumption and investment has been unwound.
"The question now is whether growth in advanced economies will be self-sustaining.â€ť
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