Bank of England: monitoring Brexit (pic: Terry Murden)

Sterling fell after a Bank of England policymaker said it may need to cut interest rates should Brexit uncertainty continue to hang over the UK economy.

A cut may still be necessary even if the UK avoids a no-deal exit, said Michael Saunders.

Interest rates have been unchanged at 0.75% since August 2018, when they were raised from 0.5%, having hit a record low of 0.25% after the 2016 EU referendum.

Mr Saunders said the Bank could launch further asset purchases – restart its quantitative easing programme – if rates hit rock bottom.

Speaking to businesses in Barnsley, said: “If the UK avoids a no-deal Brexit, monetary policy also could go either way and I think it is quite plausible that the next move in Bank Rate would be down rather than up.”