Proactive Investors - The pound fell to a two-week low as markets reacted to comments from Bank of England Governor Andrew Bailey that the central bank could become a "bit more aggressive" on rate cuts if inflation remains in check.
Bailey, who next convenes with the BoE's monetary policy committee in early November, gave the comments during an interview with the Guardian, where he said the committee could become "a bit more activist" on rate cuts if inflation continued to ease.
This week, with oil prices rising again amid fighting in the Middle East, there have been concerns raised about inflation being pushed back up after retreating during the past year.
The consumer prices index most recently fell to 2.2% – just above the BoE's official 2% target.
Asked about the fighting between Israel and Iran, he said "geopolitical concerns are very serious" and there "are obviously stresses and the real issue then is how they might interact with some still quite stretched markets in places".
Bailey said the Bank watches development closely to see the impact of the latest news, but conversations with counterparts in the region suggest "a strong commitment to keep the market stable".