On Monday, the Bank of England said that it is monitoring the market closely after the British Pound fell to a historic all-time low against the US dollar.
The Bank of England Governor Andrew Bailey said in a statement that “the Bank is monitoring developments in financial markets very closely in light of the significant repricing of financial assets.
The role of monetary policy is to ensure that demand does not get ahead of supply in a way that leads to more inflation over the medium term.”
Sterling had fallen as much as 4.8% to trade below $1.04 early Monday morning. It’s only extended the losses from last week after Finance Minister Kwasi Kwarteng announced the new mini-budget for the UK government.
Bailey said that the central bank’s monetary policy committee would make a “full assessment” in November during its next scheduled meeting and “act accordingly” if needed.
“The MPC will not hesitate to change interest rates as necessary to return inflation to the 2% target sustainably in the medium term,” he added.
The Prime Minister Truss’ administration is currently working towards putting tax cuts in place, the likes of which have not been seen in Britain since 1972. On Monday afternoon, the UK Treasury announced that the medium-term fiscal plan would begin on November 23.
The U.K. Treasury on Monday afternoon said the government would set out its medium-term fiscal plan on Nov. 23.
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