The Bank of England could cut its target cash rate as soon as the end of this week in response to Great Britain voting to leave the European Union.
Bank officials gather on Thursday for their first policy meeting since the vote last month and they are expected to set the stage for a rate cut in August. BOE governor Mark Carney previously said some monetary policy easing was likely in coming months.
However, some economists believe the bank's monetary policy committee will do more on Thursday, cutting the target rate to 0.25% from the current 0.5% before starting a quantitative easing programme next month.
Craigs Investment Partners broker Chris Timms said future pricing implied a 74% chance of a rate cut.
It would be the first move in interest rates since March 2009.
The British pound recorded its third consecutive weekly drop on Sunday, making it 2016's worst performer among major currencies, according to Bloomberg.
Mr Timms warned there was more pain ahead for the UK currency. Sterling was going to fall further as the effects of the uncertainty on investment growth emerged from the gloom.
EU finance ministers start meeting late today (NZ time). They would issue a statement at their meeting urging bank regulators to avoid imposing a disproportionate increase of costs on European banks, Reuters reported.
China would be back in focus this week with its second-quarter economic growth figures scheduled for release on Friday afternoon, along with retail sales, industrial production and fixed asset investment data for June, Mr Timms said.
For the previous quarter, China gross domestic product growth was 6.7%, the weakest since the first quarter of 2009, he said.
The June quarter was expected to show a further slowdown and consensus forecasts were sitting at 6.6%.
The United States second-quarter reporting season began today. Alcoa started things off and other financial companies - including Wells Fargo, Citigroup, Blackrock and JP Morgan - were to follow later in the week, Mr Timms said.
Relative to the corresponding quarter a year ago, overall S&P500 earnings were forecast to be down 5.3%, making it the fourth consecutive quarterly decline in earnings.
Four sectors were expected to see gains and six were forecast to have falls. Energy companies were again expected to see severe falls. Excluding energy, S&P500 earnings were still forecast to be down for the quarter but only by a marginal 0.8%, he said.
