A stimulus package for the United Kingdom this August just became more likely

Speaking of the PMI data, Weale said: “They are the best short-term indicator we have at the moment”.

Bank of England policymaker Martin Weale said he favours stimulus measures to shore up the United Kingdom economy after a post-referendum report pointed to a major growth slowdown.

At this month’s MPC meeting, only one member of the committee, Gertjan Vlieghe, voted to cut interest rates.

The FTSE index was boosted on Tuesday by fresh expectations of more aggressive monetary easing by the Bank of England at the August policy meeting.

The Pound Sterling earlier struck a 2-week trough after one policymaker at the Bank of England suggested that the latest batch of disappointing data from the United Kingdom convinced him of the need for more monetary policy easing.

The BOE has already taken some action to support growth in the aftermath of the referendum by easing regulatory restraints on United Kingdom banks in a push aimed at allowing them to lend an extra GBP150 billion to United Kingdom businesses and households.

As reported at 11:04 am (BST) in London, the GBP/USD was trading at $1.3126, down 0.10%; the pair has ranged from a low of $1.307 to a peak of $1.314. “If we’re talking about having an effect by the end of the year, there is very little that the bank can do”, he told the FT’s Chris Giles.

With Weale now appearing to lean toward that view, that potentially leaves Kristin Forbes as one of the only dissenters.

“I see things rather differently from what I would have done had we not had those numbers and the material point is that they were collected after July 12, so after the initial shock of the referendum”, Weale said of the PMI.

Economists say a cut in the key interest rate to 0.25% from the current, record low of 0.5% is the most likely form of stimulus to be provided by the MPC.

The pound dropped the most among developed- market currencies Tuesday after a report that Bank of England policy maker Martin Weale has begun to favor immediate stimulus for the United Kingdom economy.

The pound lost ground on Tuesday (26 July), after a senior Bank of England’s policymaker said he changed his mind over the prospects for further stimulus from a week ago when he urged the bank to adopt a more cautious stance. “Although you can’t say there’s a clear signal, if you spend all the time waiting for a clear signal, it never comes”, said Weale.

In light of the slowdown in the economy, a majority of analysts polled by Reuters had already expected a rate cut and some believe the Bank could restart its £375bn quantitative easing or bond buying programme.

But critics argue that monetary policy works with a delay, so action in August is unlikely to have any effect on the real economy until the end of the year.