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Carney makes pledge to keep rates low

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Bank of England Governor Mark Carney has promised to keep interest rates lower for longer, ahead of the release of UK GDP growth data for the third quarter.

Speaking at a Financial Times event, Carney (pictured) said he will not rush to raise interest rates or withdraw emergency support for banks and businesses.

His comments come prior to the release of the first estimate Q3 data by the Office for National Statistics today. The data is expected to show the UK economy grew 0.8% in the third quarter, indicating the recovery is definitely underway.

“The recovery has begun, it is strengthening. But we are not going to withdraw monetary stimulus until it has gained that traction,” Carney reportedly said.

The Governor also outlined an easing of rules for banks in need of short-term cash, saying, in future, banks will be able to use lower-grade collateral to access BoE funds, and pay less for the privilege.

However, he stressed the move is not a soft touch on bank regulation, five years after the taxpayer saved the banking sector from collapse.

“Five simple words describe our approach: we are open for business,” he told the audience.

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