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The pound fell to a three-month low on Wednesday after Bank of England governor Andrew Bailey cast doubt on the need for further interest rate rises.

Sterling was down 0.5 per cent on the day against the dollar to $1.249 after Bailey told MPs that the UK economy was now “much nearer the top of the cycle on the basis of current evidence”. 

The BoE governor said the economy had “moved [on] from a period… where it was clear [interest] rates needed to rise going forward and the question was how much”. He added: “We’re not in that place any more.”

But Bailey stressed he was not providing guidance ahead of the September Monetary Policy Committee meeting. The BoE raised interest rates to 5.25 per cent in August.

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