Sterling slipped below $1.23 against the dollar after a Bank of England policymaker said the next move for the central bank could be a rate cut.
Speaking to local businesses in Northern England, Bank of England policymaker Michael Saunders said the U.K. could be looking at an interest rate cut if uncertainty around Brexit continues to persist.
The British currency slipped more than 0.4% against the dollar on the back of these comments to trade at $1.228. Sterling is down more than 3% since the start of the year and is down more than 1% since the U.K. voted to leave the European Union in June 2016. "It is possible that political events could lead to a further period of entrenched uncertainty about the nature of, and the transition to, the United Kingdom's eventual future trading relationship with the European Union," the bank said in a press release.
"In this case, it might well be appropriate to maintain a highly accommodative monetary policy stance for an extended period and perhaps to loosen policy at some stage, especially if global growth remains disappointing," he said.puts the probability of a rate cut at the central bank's meeting in early November at 8%, with most investors expecting no change to borrowing costs less than one week after the U.K.'s scheduled departure date.
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