Governor says Bank may be ‘more aggressive' on rates

Bank of England governor Andrew Bailey has said interest rate cuts could soon become “more aggressive”, sparking a drop in the value of the pound.

- ALBERT TOTH

Mr Bailey said the Bank may be able to become “more activist” in its approach to borrowing costs if recent positive inflation trends hold. The comments mark a departure from his previous approach, when he said rates would only be lowered “gradually.” Shortly after that interview, the pound fell by nearly one per cent against the dollar and the euro.

The Bank cut rates from 5 per cent to 5.25 in August, the first reduction since March 2020, after inflation returned to the 2 per cent target. Although the figure has since risen back up to 2.2 per cent, experts have been forecasting another interest rate reduction before the end of the year.