New Bank of England boss warns there is no quick fix

The man the Government has pinned its hopes on to steer the UK out of the financial crisis has warned that he cannot single-handedly get rid of risks to the economy.

Speaking at the Davos World Economic Forum yesterday, Mark Carney, the Canadian who becomes Governor of the Bank of England in July, said that "there is not an ability of central banks to take all these risks out". The statement plays down any expectation that he can help extract Britain quickly from its economic quagmire.

However, Mr Carney rejected suggestions that the Bank's policy, which has focused on low interest rates and money printing, had "maxed-out". And, in the face of news that GDP shrank by 0.3 per cent in the last quarter of 2012, threatening a triple-dip recession, he pledged to maintain economic stimulus and asserted that "all major economies" had ways of returning to health.

The Canadian was considered to have taken a veiled swipe at the present Governor, Sir Mervyn King, recently, when he suggested that GDP growth should be the Bank's priority rather than meeting rigid inflation targets. Sir Mervyn had warned that not exceeding 2 per cent was vital, as evidenced when prices went out of control during the 1970s.