The Bank of England on Thursday held interest rates steady, saying it most work to reach its goal of 2% inflation in a sustainable way.

Given uncertainty over the likely performance of the US economy and the Fed’s response, Mann suggested that the Bank needed to be cautious. If the Bank took a “dovish” approach, for example, this could cause sterling to undergo a major deterioration, which would then feed through into import prices.

On Wednesday, the Fed became the latest major central bank to reduce borrowing costs, cutting its main interest by half of a percentage point to roughly 4.8% from a two-decade high of 5.3%, where it had stood for 14 months. It also signaled that there will be more cuts to come in the next few months.