Staff at the Bank of England are on alert for potential job cuts in Threadneedle Street after the governor, Andrew Bailey, warned of tough decisions about the institution's future cost base.

Sky News has learnt that Mr Bailey informed Bank of England employees in a memo last week that it was taking a detailed look at costs, although it did not specifically refer to the prospect of redundancies.

One source said the memo had been sent while Mr Bailey was attending the International Monetary Fund (IMF) meeting in Washington.

Its precise wording was unclear on Monday, but one source said it had warned of "tough choices" that would need to be made as the bank accelerated its investment in new technology.

They added that managers had been briefed to expect to have to make savings of between

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