The pound fell sharply Thursday after Bank of England Governor Andrew Bailey said the central bank could be more aggressive in cutting borrowing costs if inflation remained benign.

The Bank of England could move more aggressively to cut interest rates if inflation pressures continue to weaken but conflict in the Middle East could push up oil prices, Governor Andrew Bailey said.

The value of the pound dropped sharply after the Governor of the Bank of England said interest rate cuts could become a “bit more aggressive”. Sterling sank as much as 0.8pc to fall below $1.32 for the first time in a fortnight after Andrew Bailey said policymakers could become “a bit more activist” about lowering borrowing costs.

The comments follow Bank governor Andrew Bailey hinting interest rate cuts could soon become "more aggressive".

Huw Pill has signalled that rates should be cut in a 'gradual' manner, amid caution over the long-term path of inflation

The Bank of England should move only gradually with cutting interest rates, Chief Economist Huw Pill said on Friday, a day after Governor Andrew Bailey was quoted as saying the BoE might move more aggressively to lower borrowing costs.

The British pound experienced a significant decline following comments from Andrew Bailey, the Governor of the Bank of England, indicating that the central bank could adopt a more aggressive approach in cutting interest rates if inflation continues to ease.