Bank of England Governor Mark Carney yesterday signalled the possibility of a cut in base rates from 0.75 per cent if evidence built that current UK economic weakness could persist.

Sterling was, at 5pm in London, trading around $1.3069 in the wake of Mr Carney’s comments, down half-a-cent on its Wednesday close.

Two members of the Bank’s nine-strong Monetary Policy Committee, Michael Saunders and Jonathan Haskel, voted unsuccessfully for a quarter-point cut in benchmark UK interest rates in November and December. Mr Carney voted for no change in rates at these meetings.

The Bank of England Governor yesterday cited “tentative signs” of global growth stabilising, and a tight UK labour market.

However, he highlighted the impact of Brexit and declared: “There are downside risks from global growth and the possibility that uncertainties over future trading relationships could remain entrenched. With the relatively limited space to cut Bank Rate, if evidence builds that the weakness in activity could persist, risk management considerations would favour a relatively prompt response.”

He added: “The MPC has repeatedly emphasised that monetary policy cannot prevent either the necessary real adjustment as the UK moves to its new trading arrangements or the weaker real income growth likely to accompany that adjustment. Monetary policy does, however, have a role to play in supporting the economy during the adjustment process.”

Financial markets are pricing in a roughly 14% chance of a rate cut at the MPC’s meeting on January 30. This will be the last MPC meeting for Mr Carney, who will be succeeded as Bank Governor by Financial Conduct Authority chief executive Andrew Bailey on March 16. The chance of a rate cut by mid-year is put by markets at about 50%.

Surveys this month from the Chartered Institute of Procurement and Supply and IHS Markit have fuelled fears the UK economy may have failed to grow in the fourth quarter of last year.