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The pound fell sharply Thursday after Bank of England Governor Andrew Bailey said the central bank could be more aggressive in cutting borrowing costs if inflation remained benign.

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 fell more than 1% against the U.S. dollar Thursday, after Bank of England Governor Andrew Bailey told the Guardian newspaper that more good news on inflation could allow the central bank to be "a bit more activist" in its approach to rate cuts.

The comments follow Bank governor Andrew Bailey hinting interest rate cuts could soon become "more aggressive".

Huw Pill has signalled that rates should be cut in a 'gradual' manner, amid caution over the long-term path of inflation

Andrew Bailey tells the Guardian the Bank could become a “bit more aggressive” in cutting interest rates if news on inflation continued to be good

Andrew Bailey, Governor of the Bank of England, gestures as he addresses the media during a press conference at the Bank of England in London on Aug. 1, 2024. The British pound fell more than 1% against the U.