LONDON: Bank of England Governor Mark Carney said on Tuesday that the central bank would "undoubtedly" take the recent fall of sterling into account when its policymakers meet to consider cutting interest rates in the coming days.
"It's undoubtedly something we will take into account over the course of the next week as we sit down, update our forecast and make our policy decision," Carney told lawmakers.
He also said inflation, which hit 1.0 percent in the 12 months to September, could pick up to between 1.5 or 1.8 percent by the spring of 2017 and there were limits to the Bank's willingness to "look through" the effect of annual inflation rising past its 2 percent target. The BoE is due to announce on Nov. 3 whether it has cut interest rates to a new record low.
It said in September it expected most of its policymakers would back a rate cut, unless there was a significant change in the outlook for the economy.
Since then, signs have grown that the hit to the economy from the Brexit vote in June has not been as severe as the BoE had previously thought and the value of the pound has fallen further.
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