04 Oct 2024
The Bank of England has suggested that it could cut interest rates more quickly.
Andrew Bailey, Governor of the Bank of England, said that the Bank could be more aggressive in cutting rates. In August, interest rates were cut from 5.25% to 5%, the first drop in more than four years.
The Bank has two meetings remaining this year, in November and December. Mr Bailey stressed that it is 'vital' that inflation remains low in order for the Bank to cut interest rates.
Following Mr Bailey's comments on interest rates, the pound fell by 1.5ยข against the US dollar on international currency markets.
Kathleen Brooks, Research Director at broker XTB, said: 'The market has used Bailey's comments as a green light to price in more [interest rate cuts]. The pound has already sold off sharply this week, so further downside could be limited in the short term, however, Bailey has made it harder for the pound to recover.'