Barclays boss Jes Staley has warned that cuts in UK interest rates are becoming a less powerful tool to boost the economy and risk taking their toll on the banking system.
Talking at the World Economic Forum in Davos he said the “effectiveness of even looser monetary policy is losing its grip”.
He warned that rock-bottom interest rates – currently 0.75% in the UK – put pressure on retail banking profit margins, which could hurt lenders and their ability to support the economy.
Instead, he said, the key developments to support the economy this year could come from the Government’s fiscal moves, with all eyes on Chancellor Sajid Javid’s Budget in March.
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