Bank of England policymaker Catherine Mann said on Monday that a 50 basis points rate increase would reduce the risk of domestic inflation being boosted by weaker sterling, as reported by Reuters.

Additional takeaways

"I open the door to a policy rate reversal in the medium term when the domestic supports to demand fade and when weakness in external sources of demand bite."

"It is important to react in a timely fashion to a US monetary policy shock that causes the UK price level to jump."

"If near-term inflation is the dominant concern, then the activist path addresses that."

Market reaction

GBP/USD, which touched a daily high of 1.2280 earlier in the day, was last seen trading flat on the day at 1.2227.