By Jonathan Davies

The Bank of England must be prepared to cut interest rates even further if low inflation persists, one of its chief economists has said.

Andrew Haldane said inflation had "dropped like a stone" in recent months, but stressed that the Bank needs to be ready to "move off either foot" in order to get inflation back to the official target of 2%.

Mr Haldane was one of members of the Monterary Policy Committee (MPC) to vote unanimously in favour of keeping interest rates at the record low of 0.5%, where they have been for six years, this month.

The economist said he did "not currently see an immediate case for a policy change in either direction". But he said "the chances of a rate rise or cut are broadly evenly balanced".

"In other words, my view would be that policy may need to move off either foot in the immediate period ahead, depending on which way risks break," he said in a speech on Thursday.

“Even without any asymmetry in risks to the inflation outlook, a case can be made for policy easing today. Were downside risks to inflation to materialize, this case is strengthened.”

Mr Haldane's comments are of his personal opinion and do not reflect the official position of the Bank of England or MPC.