Sterling erased early gains against the dollar on Thursday, moving back towards the previous day's 2-1/2 month low, as two new Bank of England policymakers sounded a balanced note on risks to inflation and growth.
In testimonies to the British parliament's Treasury Committee, new Monetary Policy Committee members Timothy Besley and Andrew Sentance were seen as supporting expectations for a BoE rate hike to 5 percent in November, with both of them mentioning inflationary pressures as a potential risk.
But with Besley saying wage pressures have eased, and Sentance saying the expected slowdown in the US economy is a "major worry", their tone was not hawkish enough to point to further tightening beyond November.
"It's all fairly balanced stuff, and not wanting to give too much away. Overall they still look like they are going to raise rates in November ... but the comments do suggest that it's not going to be another series of rate hikes because they are still worried about growth," said James Knightley, economist at ING.
"There is that factor that they may not raise rates as much as the market had been pricing in and therefore sterling's taken a little bit of a knock on that," he added.
By 1354 GMT, sterling was up 0.15 percent on the day at $1.8566, around 20 ticks below levels seen before the MPC members' testimony. On Wednesday it hit a 2-1/2 month low of $1.8516. Sterling was steady on the day at 67.53 pence, after weakening to 67.63 pence after the comments.
The balanced tone from Besley and Sentance erased earlier sterling gains on the back of data from the Royal Institute for Chartered Surveyors showing that house prices rose at their fastest rate in nearly four years in three months to September.