The Bank of England allotted 37.059 billion pounds ($49.52 billion) in seven-day funds in its weekly short-term repo on Thursday, down from last week's record 44.523 billion pounds.

Governor Andrew Bailey has hammered home the message that rates will only fall 'gradually' - even though inflation has dropped close to 2 per cent.

On Wednesday, the Fed became the latest major central bank to reduce borrowing costs, cutting its main interest by half of a percentage point to roughly 4.8% from a two-decade high of 5.3%, where it had stood for 14 months. It also signaled that there will be more cuts to come in the next few months.