Bank of England Governor Andrew Bailey hinted that four interest rate cuts could be in the pipeline over the coming year. Bailey told the Financial Times that inflation had come down faster than the central bank had been anticipating.

Bank of England Governor Andrew Bailey signaled that policymakers still believe four quarter-point interest rate cuts next year is the most likely scenario as he said inflation has come down “faster than we thought it would.

He confirmed the correct definition of “gradual” rate cuts the BoE has predicted is roughly a quarter-point reduction every quarter. That would imply UK rates falling to 3.75 per cent by this time next year.

Sterling briefly dipped against the dollar on Wednesday after Bank of England Governor Andrew Bailey said gradual cuts in interest rates were likely over the coming year, and the process of falling inflation was well embedded.