Optimistic UK interest rates will fall further

Bank of England (BoE) Governor Andrew Bailey said on Thursday that he was optimistic that UK interest rates would fall, but added that they needed more evidence, according to Reuters.

Bailey went on to explain that he needs to see residual inflationary pressures dissipate and that it is imperative that the UK improves on its current potential growth of 1.2%-1.3%. He also noted that the UK government will make the right decision about the treatment of QT in the tax rules.

Market reaction

These comments failed to trigger a noticeable reaction in GBP/USD. At press time, the pair was up 0.3% on the day at 1.3250.