The Bank of England cut growth forecasts yesterday and the lone advocate of a rate hike reversed his position, suggesting rates were on hold for an extended period even as its governor said the next move was still likely to be up.

Echoing downbeat comments from central banks around the globe, BoE chief Mark Carney warned that global growth was only modest at best with risks rising as emerging economies struggle, holding back Britain despite its domestic resilience.

Highlighting risks from China’s economic rebalancing, more capital flows, tighter financial conditions, and increased market volatility, Carney said risks to Britain were rising.

“All of these developments pose downside risks to growth in the United Kingdom via trade, financial and confidence channels,” Carney told a news conference.

“The outlook for trade is particularly challenging with net exports expected to drag on UK growth over the forecast period.”

With global market turmoil increasing, emerging markets struggling and oil prices collapsing, central banks around the globe have pared back growth and inflation expectations, openly discussing the need for more accommodation, erasing hopes that policy normalisation could start later this year.

The Bank of Japan last week cut rates into negative territory, the ECB hinted at a further cut in March while dovish comments from New York Fed Governor William Dudley overnight suggested that no US rate hike could come at all this year.

Britain has stood out from Europe’s economic weakness with relatively healthy growth, little spare capacity and a jobless rate near the long term equilibrium, raising expectations that Britain would soon follow the Fed’s December hike.

Global turmoil dashed those hopes but Carney said the next rate move is still likely to be a hike rather than a cut as the current market rate path implied a slight overshoot of the inflation target.