Bank of England chief economist Huw Pill said on Friday that he thinks there is scope for more rate cuts if disinflation continues.
The official noted that he is looking at wages, margins and the labour market's tightness. "To a large extent, we will have to look through the inflationary impact of the government budget," he added.
The official also warned that political developments in the U.S. and Germany do pose some questions.
Also, Pill said that, in his opinion, a gradual reduction in interest rates is conditional and noted that the rates' path depends on economic disturbances and the direction of travel is disinflation.
In addition, the policymaker expressed the view that continued restriction is needed, admitting that Britain as an open economy is exposed to global shocks.