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BoE's Carney: Central banks have 'much less ammunition' to ward off downturns

Global central banks are running out of policy measures to fight off a possible recession in the future, outgoing Bank of England Governor Mark Carney warned.

The global economy is inching toward a "liquidity trap," a situation with low interest rates and higher savings wherein monetary policy easing does not stimulate additional spending, Carney told the Financial Times in an interview.

"It's generally true that there's much less ammunition for all the major central banks than they previously had, and I'm of the opinion that this situation will persist for some time," he was quoted as saying in the report.

Carney said the BoE could fall short of "monetary policy space" should the U.K. slide into a recession, and that policymakers are finding a way out of the issue.

However, Carney noted that the effect of policy easing by the Fed and the European Central Bank has started to ripple across the global economy.

Carney endorsed the ECB's calls for an increase in fiscal spending to boost economic growth.