The pound falls again versus the dollar after the Bank of England says it's monitoring financial markets following the currency's slide to a record low

The British pound fell after the Bank of England said it's watching financial markets, but didn't mention any action the central bank would take to stop the currency's decline.

BoE Governor Andrew Bailey said in a statement Monday that the bank is closely watching developments in financial markets.

The statement caused the pound to fall. The bank issued a statement after the pound sterling fell to a historic low against the dollar. When the UK switched to a decimal-based currency system, the pound fell to its lowest level since 1971.

Cable, the nickname for the pound-dollar exchange, recovered some ground and was able to bounce back above $1. Financial markets were looking for the Bank of England to act to aid the pound.

The role of monetary policy is to make sure that demand doesn't get ahead of supply in a way that leads to more inflation in the long run. Bailey said that the Monetary Policy Committee would make a full assessment of the impact on demand and inflation from the Government's announcements and the fall in sterling.

The central bank had a policy meeting in November. Since the beginning of the year, the UK's benchmark interest rate has been raised seven times. The rate was raised last week. British inflation was slightly lower in August.

The pound has fallen after the government introduced a plan to expand the economy. Tax cuts are included in the mini-budget. The plan spooked investors because they feared it would increase inflation and increase government debt.

Financial markets were pricing in a rise in UK interest rates to 6 percent next year, due to the depreciation of the pound.

Mark Makepeace said on CNBC that the pound could fall to parity with the dollar if the bank didn't step in. The closely watched benchmark of UK blue-chip stocks is included in the global lineup of financial indexes. The UK's benchmark index ended Monday's session up by less than one percent.

The pound is expected to reach parity with the dollar by the end of November, and then fall to 0.975 by the end of 2022, according to a report.