Sterling drops as BoE chief economist backs rate cut

Sterling slumped against the US dollar after the Bank of England's chief economist Andy Haldane said the UK has an equal chance of seeing a rate cut as a rate hike, contrary to consensus expectations.

BoE's chief economist Andy Haldane (pictured) delivered a dovish message on Thursday, suggesting rates in the UK may be cut further in the short term to mitigate deflationary risks. After his speech at the BizClub, sterling fell to a seven-year low against the US dollar, trading 1.5% lower by later afternoon on Thursday at $1.4727. Haldane said that if monetary policy was set by an algorithm rather than a committee, it would current suggest that "with the lower bound set at zero, the optimal path for interest rates would involve them being cut in the short run towards zero for around ...