While testifying before the UK Treasury Select Committee on Tuesday, Bank of England (BoE) Deputy Governor Ben Broadbent noted that wage growth and services inflation are twice the rate consistent with a sustainable CPI inflation.

"I don't agree that all the evidence points in the direction of rate cuts," Broadbent added and said the timing of any adjustment to policy will depend on the actual evolution of the economic data.

"I cannot be precise about how rapidly domestic inflation rates will fall back – or therefore, when it will be appropriate to reduce the degree of policy restriction," he said but acknowledged that inflation forecasts certainly do not rule out a policy easing at some point this year.

Market reaction

GBP/USD continues to fluctuate at around 1.2600 following these comments.