The Governor of the Bank of England, Andrew Bailey, has suggested that the central bank may adopt a "more aggressive" stance in reducing interest rates. The pace at which borrowing costs are lowered will largely hinge on inflation levels.

In August, the Bank made its first interest rate cut in over four years, lowering rates from 5.25% to 5%.

In a recent interview with the Guardian, Mr. Bailey highlighted that the Bank is closely monitoring developments in the Middle East, particularly any fluctuations in oil prices that could impact inflation.

Since Russia's invasion of Ukraine in February 2022, crude oil prices surged dramatically, contributing to inflation reaching a 40-year high. Although inflation has since eased, recent tensions between Israel and Hezbollah have pushed oil prices above $76 a barrel amid concerns over potential supply disruptions.

"Geopolitical concerns are very serious. It is tragic what’s going on," Mr. Bailey remarked. "There are obviously stresses, and the real issue then is how they might interact with some still quite stretched markets in places."

However, he expressed optimism, stating, "From all the conversations I have with counterparts in the region, there is, for the moment, a strong commitment to keep the market stable."