The pound fell to almost six-year lows against the dollar on Tuesday after Bank of England Governor Mark Carney said policymakers want to see faster U.K. growth and stronger inflation before raising interest rates.
GBP/USD hit lows of 1.4207, the weakest since March 2009, off earlier highs of 1.4338.
The drop in the pound came after Carney said collapsing oil prices and an “unforgiving” global environment meant that any interest rate increase could be delayed.
“It is clear to me that since last summer, progress has been insufficient to warrant a tightening of monetary policy,” Carney said.
“Now is not the time to raise interest rates.”
Carney said that he did not have a “set timetable” for raising interest rates.
“It has always been the case that, because the economy is subject to unforeseen disturbances, the precise path for Bank rate rises cannot be pre-ordained.”
Carney said a decision on when to raise rates would not be driven by the “calendar” but by “economic prospects.”
The remarks came during a speech at the University of London.
Earlier Tuesday official data showed that the annual rate of inflation in the U.K. rose at the fastest rate in almost a year in December.
The consumer price index rose 0.2% from a year earlier, ahead of forecasts of 0.1% and the highest since January 2015.
The data comes at the end of a year which saw consumer prices inflation hover close to zero, prompting investors to push back expectations on the timing of a rate hike.
Sterling has also been pressured lower by uncertainty arising from a looming referendum on Britain’s membership in the European Union.
The pound was slightly higher against the euro, with EUR/GBP at 0.7641, not far from Friday’s one-year highs of 0.7694.