Jun 20, 8:44 AM EDT

Bank of England Governor Mark Carney is downplaying the possibility of an interest rate increase amid the uncertainty wrought by Britain's pending departure from the European Union



Photo Gallery
Animal census at the London Zoo
Latest News from Britain
London police have linked the death of a 51-year-old man to the mosque attack, saying he died of "multiple injuries" after a van plowed into worshippers near two mosques in north London

Britain's Home Secretary says the country has entered a new phase of terror-related attacks

Prince Philip, the elderly husband of Queen Elizabeth II, has been hospitalized with an infection but is said by Buckingham Palace to be out of bed and in good spirits

Queen Elizabeth II has delivered a speech that outlines the government's legislative program

Queen Elizabeth II did not mention the planned state visit of President Donald Trump in her speech outlining her government's legislative agenda.

Queen Elizabeth II will outline the government's upcoming legislative program with far less pageantry than usual in a speech expected to be dominated by discussion of Britain's upcoming departure from the European Union

Multimedia
A district summary of the Beige Book
Measuring economic stress by county nationwide
Mall malaise: shoppers browse, but don't buy
Unemployment by the numbers
Family struggles with father's unemployment
Saying an affordable goodbye
Hard times hit small car dealer
Latest Economic News
Mexico's central bank has raised its benchmark interest rate a quarter-point to 7 percent in an effort to limit inflation

Egypt doubles subsidized food millions of ration card holders depend on, raises pensions amid soaring prices

Egyptian President Abdel-Fattah el-Sissi says the government will increase the monthly capacity of ration cards through which it distributes food subsidies in an attempt to ease the effects of hard-hitting economic reforms

A United Nations economist has been arrested in New York on fraud charges related to his hiring of a Bangladeshi domestic worker

Cyprus' finance minister says the country has managed to secure the lowest-ever interest rate on a public bond issue, hailing it as a strong signal of trust from international markets in the Cypriot economy

Bank of England Governor Mark Carney is downplaying the possibility of an interest rate increase amid the uncertainty wrought by Britain's pending departure from the European Union

When Britain voted to leave the European Union a year ago, one of the main arguments made by proponents of Brexit was that the country was being held back by the sclerotic economic performance of many of its neighbors across the English Channel

Bank of Japan keeps lax monetary policy intact, notes signs of improvement in the world's third largest economy

A federal judge has tossed out evidence seized from the home and business of a Wall Street executive, saying the government "was grossly negligent" in its searches

US retail sales slid 0.3 percent in May, biggest drop in 16 months

Interactives
Greece's Debt Threatens to Spread
State budget
gaps map
Auto industry problems trickle down, punish Tennessee county
Women give old Derby hats a makeover in tough economy
S.C. town deals with highest unemployment in South
How mortgages were bundled and sold as securities
Tracking the $700 billion financial bailout
Tracking the year's job losses
State-by-state foreclosures since 2007
Credit crisis explained
Presidents and their economic legacies
Lexicon of the financial crisis
Americans' addiction to debt

LONDON (AP) -- Two of the most senior figures in Britain's economy argued Tuesday for cooperative, not adversarial, talks over the country's exit from the European Union, calling for a deal that benefits both sides rather than erecting barriers that will hurt everyone.

Treasury chief Philip Hammond and Bank of England Governor Mark Carney said in separate speeches that Britain must use the negotiations to reduce obstacles to trade in services while protecting the benefits of free trade in goods. Services, including banking and insurance, account for 80 percent of Britain's economy.

"It would be all too easy to give in to protectionism," Carney said. "But as we learned in the 1930s, that road leads neither to equity nor prosperity. Raising barriers to trade disproportionately hurts the least well off through higher prices and fewer opportunities."

Carney also downplayed the possibility of an interest rate increase amid the uncertainty wrought by Britain's pending departure. He said that while rates will have to rise as the economy strengthens, "now is not yet the time to begin that adjustment."

In addition to his comments on trade, Hammond said immigration should be managed but not "shut down" as he emphasized the need to protect economic growth. The remarks at the annual Mansion House session for leaders of Britain's financial industry suggest Hammond prefers a deal that preserves more trade links with the EU than the "hard Brexit" supported by his boss, Prime Minister Theresa May.

May has put her focus on cutting EU migration, and the EU has said that if Britain wants to tighten its borders for EU citizens, it would not be allowed to remain in the tariff-less EU single market.

The government, which began formal talks with the EU on Monday, is under pressure to soften its stance on Brexit after losing its majority in an early election this month. Analysts believe many voters rejected May's Conservative Party because of concerns its approach to the talks would dim Britain's economic prospects.

Some 90 percent of those surveyed in a recent poll thought free trade was good for the economy, regardless whether they voted to leave the EU or remain, Hammond said.

"Just as the British people understand the benefits of trade - so, too, they understand how important it is to business to be able to access global talent and to move individuals around their organizations," he said.

Hammond also took a shot at his EU counterparts, suggesting that recent attempts to increase regulation of financial services were a veiled attempt to wrest business away from Britain.

"Let's be honest, we are already hearing protectionist agendas being advanced, disguised as arguments about regulatory competence, financial stability, and supervisory oversight," Hammond said. "We can have no truck with that approach."

The European Commission, the bloc's executive body, has moved to tighten regulation of clearinghouses that process euro-denominated contracts, threatening tens of thousands of jobs in Britain once the country leaves the EU. Under rules proposed last week, any clearinghouse considered important to the EU financial system would have to accept direct oversight from EU regulators and, if requested, relocate to inside the bloc.

Clearinghouses act as intermediaries to reduce the risk of default by ensuring funds are delivered to the seller - a way of undergirding the financial system. London is currently the European center for this business, handling 98 percent of all euro-denominated contracts for interest rate swaps.

Carney, whose agency oversees much of Britain's financial system, said turning inward would increase costs for business and reduce financial stability. Instead, the two sides should look for a "cooperative and reciprocal agreement" that strengthens the financial system, he said.

"Fragmentation is in no one's economic interest," Carney said. "Nor is it necessary for financial stability. Indeed it can damage it."

© 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.