UK Floods Will Hit Economic Recovery, Warns Mark Carney

Floods Will Hit Economic Recovery, Warns Carney
Mark Carney, governor of the Bank of England, pauses during the bank's quarterly inflation report news conference at the Bank of England in London, U.K., on Wednesday, Feb. 12, 2014. The Bank of England said it will keep its key interest rate at a record low even after unemployment reaches its 7 percent threshold as it introduced a new phase of Carney's forward-guidance policy. Photographer: Chris Ratcliffe/Bloomberg via Getty Images
Mark Carney, governor of the Bank of England, pauses during the bank's quarterly inflation report news conference at the Bank of England in London, U.K., on Wednesday, Feb. 12, 2014. The Bank of England said it will keep its key interest rate at a record low even after unemployment reaches its 7 percent threshold as it introduced a new phase of Carney's forward-guidance policy. Photographer: Chris Ratcliffe/Bloomberg via Getty Images
Bloomberg via Getty Images

Britain's economic recovery will suffer "disruption" due to the destruction caused by the floods, Bank of England governor Mark Carney has warned.

"There's a big human cost here and I absolutely recognise that," he told ITV News.

"Then there's the disruption to economic activity that we see just through transport, but farming clearly will be affected for some time, other businesses. It is something that will affect the near time outlook."

Carney recognised that linking the chaos caused by the floods to its effect on the country's gross domestic product looked "cold and antiseptic" but added that natural disasters usually cause a "hit to GDP as it's going on and then you get that back with the repair."

"So when you look over the stance for the horizon that the Bank of England would operate, one looks through it".

Carney was speaking after unveiling the Bank of England's latest inflation report, during which he warned that the UK's economic recovery so far was "neither balanced nor sustainable".

Despite this, the Bank of England upped its growth forecast for the UK this year to 3.4%, up from 2.9%.

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