There are clear signs that progress is being made in tackling high inflation in the UK, but much remains to be done and interest rate decisions will be tight, Bank of England Governor Andrew Bailey said.
The Bank's monetary policy committee will meet on November 2 to decide on interest rates. The BoE left rates unchanged at 5.25% in its last meeting on September 21 after 14 consecutive hikes.
"The final step really depends on tight policy," said Bailey, adding at the same time that the country's slow growth rate will continue to affect the decisions taken on Threadneedle Street.
"The economic outlook still looks very bleak," he said while speaking at an event organized by the Institute of International Finance during the International Monetary Fund (IMF)/World Bank gathering in Marrakesh, Morocco.
Inflation fell to an 18-month low of 6.7% in August, prompting the Bank to hold off on raising interest rates at the last MPC meeting.
Bailey echoed recent comments from other Bank officials stressing that they would remain open to future rate decisions after the monetary policy committee voted 5-4 to end a series of rate hikes in September.
A Reuters poll conducted late last month showed a majority of economists believe interest rates will be left unchanged at the Bank's meeting in November.
Meanwhile, the BoE's Chief Economist, Huw Pill, said that it was too early to talk about an interest rate cut.
"We have done a lot in the last two years. Many of the policies are still unclear. Have we done enough or do we need to do more? I think this is an increasingly important issue. But we will do what we have to do to keep inflation at 2% permanently," Pill said during a panel discussion on the sidelines of the IMF meeting in Morocco.
Meanwhile in the US, the Chairman of the Federal Reserve, Jerome Powell, also said that rates will be left "higher for longer," meaning that even if the central bank ends the current cycle of rate hikes and begins the process of lowering rates, interest rates will remain higher than what The Fed thinks it is necessary to maintain economic growth with inflation at 2%.
