Bank of England Governor Mark Carney said on Tuesday that a hit to Britain's economy from last month's decision by voters to leave the European Union could prompt the Bank to act, hinting again that more stimulus is on the way.
"If the outlook has worsened, to use that term, in the judgment of the MPC there always could be monetary response if that is consistent with its remit," Carney told lawmakers.
The Bank is due to announce whether it has cut rates or taken other action on Thursday.
Investors expect the BoE to cut interest rates below their already record low of 0.5 percent as soon as Thursday. However, many economists have said the Bank might wait until its next policy announcement on Aug. 4 when it will have a better sense of the impact of the "Leave" decision on the economy.
Sterling, which hit a one-week high against the U.S. dollar earlier on Tuesday buoyed by the quicker-than-expected appointment of a new British prime minister, added to its gains as Carney and other BoE officials spoke on Tuesday.
The Federal Reserve should be in no rush to raise U.S. interest rates despite a surge in June hiring, St. Louis Fed President James Bullard said on Tuesday, sticking with his view that the central bank may need only a single rate hike for years to come.
Indeed he said he expects trend job creation to slow in coming months, a normal development as the economy approaches full employment that is consistent with his view the U.S. is locked in a low growth, low inflation and low unemployment rut for the foreseeable future.
"You probably can't add 200,000 jobs a month anymore," Bullard said. "I would expect continued slowing in the pace of jobs growth, and would regard that as a normal development for this stage of the business cycle.”
Bullard, a voting member of the U.S. central bank's rate-setting committee, recently shifted his view of monetary policy, concluding that the United States had entered a low growth "regime." The appropriate target interest rate for the Fed, he said, is also low, requiring only a single rate rise unless some unexpected shock moved the economy to a better or worse state.
The Federal Reserve should not be in any hurry to raise U.S. interest rates because inflation is so low and the economy is still short of full employment, a top Fed official said on Tuesday.
"We feel like we can be patient to let the economy continue to heal before we start moving aggressively to raise rates," Minneapolis Fed President Neel Kashkari said at a Town Hall in Marquette, Michigan. "We should take our time when we go ahead and start raising rates again. There's not a huge urgency to raise rates because inflation is coming up low."
The number of regional Federal Reserve banks pushing the central bank to raise the rate it charges commercial banks for emergency loans rose to six in June, minutes from the Fed's discount rate meeting released on Tuesday showed.
The Federal Reserve banks of Kansas City, Richmond, Cleveland and San Francisco continued to push for an increase and were joined this time around by Boston and St. Louis.
Those that wanted an increase cited "expected strengthening in economic activity and their expectations for inflation to gradually move toward the 2 percent objective."
The Fed decided to hold the discount rate steady last month at 1 percent and policymakers agreed to keep its main benchmark interest rate unchanged at the subsequent policy meeting on June 14-15.
Oil prices surged 5 percent on Tuesday, the biggest daily gain since April, as investors' covering of short positions and a technical rebound helped lift the market from two-month lows.
However, crude futures pared gains in post-settlement trade after industry group American Petroleum Institute (API) reported a surprise build of 2.2 million barrels in U.S. crude stockpiles last week.
U.S. crude's West Texas Intermediate (WTI) futures settled up $2.04, or 4.6 percent, at $46.80 a barrel. Brent crude futures settled up $2.22, or 4.8 percent, at $48.47.
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