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. Speaking to The Guardian, 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 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 pound slumped to its worst single-day performance for more than a year on Thursday after the governor of the Bank of England signalled “more aggressive” rate cuts could be on the way.

Bank of England boss Andrew Bailey said that if inflation remains in check, the Bank might be able to be 'more activist' over reducing borrowing costs

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 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.