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'Closely monitoring financial markets,' says Bank of England following drop in the pound

BoE says will not hesitate to increase rates to return inflation to the 2% target

Britain Economy Bank of England

The Bank of England says it is monitoring the drop in the pound and would not hesitate to boost interest rates to control inflation.

The central bank on Monday reiterated its intention to make a full assessment of the government's tax and spending plans at the next meeting of its Monetary Policy Committee. The meeting is scheduled for November.

The bank says in a statement that it will not hesitate to change interest rates by as much as needed to return inflation to the 2 per cent target sustainably in the medium term, in line with its remit.

The British pound fell to an all-time low against the US dollar early Monday after Treasury chief Kwasi Kwarteng pledged a sweeping package of tax cuts.

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