Mark Carney

UK interest rates could need to be cut further to support growth and return inflation to target, the Bank of England's chief economist has said.

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In its latest quarterly Inflation Report, the Bank of England has forecast inflation will remain low for longer than previously expected, as a result of weak energy prices and continuing currency strength.

Sterling fell 1% against the dollar and euro this lunchtime, as rate rise expectations were pushed back, with just one MPC member voting for an increase this month.

Chancellor George Osborne has announced a bill to overhaul the Bank of England, including a reduction in the number of Monetary Policy Committee meetings.

Sterling has hit a fresh seven and a half year high against the euro after Bank of England governor Mark Carney suggested the UK base rate could rise at the turn of the year.

Housebuilders' shares have taken a dive in early afternoon trading after Bank of England governor Mark Carney said a hike in interest rates is "moving closer".