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The governor of the Bank of England Mark Carney gives a press conference, his first since the leave result of the European Union referendum, at the Bank of England in the City of London, Britain Thursday, June 30, 2016.POOL/Reuters

Investors will be watching closely as the Bank of England lays out its economic course after British voters opted for divorce from the European Union.

Britain's central bank releases its semi-annual financial stability report on Tuesday, when it is expected to provide more clues on how it will bolster the country's financial system amid mounting uncertainty.

Since Britons voted to exit the EU, known as Brexit, the country was stripped of its top investment grade credit rating, the pound sank to its lowest level in 30 years and banks are considering leaving London, one of the world's top financial centres.

Although the future is uncertain for Britain's finance industry, banks are in a much stronger place. Since the 2008-09 global financial crisis, they have boosted their liquidity levels and are well capitalized.

"There are no concerns that they would not be able to weather the uncertainty," said Jon Danielsson, director of the London School of Economics' Systemic Risk Centre, which studies threats that may trigger financial crises.

"The main worry for the British authorities is economic slowdown, in part caused by the economic uncertainty created by the Brexit decision. Both consumers and companies are likely to delay spending and investing which will then cause economic slowdown."

Britain's exit from the EU is expected to crimp its economy, with some predicting a recession. It is unknown when Britain will start the process of leaving or how trade and business will function once it has exited. In the meantime, financial services companies are pondering relocating to another EU country if they cannot continue to freely access the European market as they currently do as a member of the 28-nation bloc.

Bank of England governor Mark Carney made two public appearances in the week following the Brexit vote, reassuring markets and the public that the U.K. financial system was sound and that the central bank was prepared to deal with the economic and financial storm.

He signalled the central bank would stimulate the economy this summer, and some analysts predict an interest rate cut of one-quarter of a percentage point when the bank's monetary policy committee meets in mid-July. Analysts also forecast another round of quantitative easing, or central bank bond purchases designed to stimulate the economy.

"We got a very clear signal that we will see monetary policy easing during the summer. The only dilemma is when and what kind," said Alan Clarke, head of European fixed income strategy with Bank of Nova Scotia in London. "We got some colour. I would expect baby steps and I suspect we don't go below zero," he said.

The United Kingdom's key interest rate is 0.5 per cent, while its European counterpart, the European Central Bank, has slashed rates below zero.

But Mr. Carney has also said that the Bank of England's toolbox was limited, a statement that some central bank watchers interpreted as a sign of financial stability.

"In order to make that statement he has to be very comfortable about financial stability," said Constantin Gurdgiev, finance professor with Middlebury Institute of International Studies."The only way you would make that statement is if you are pretty comfortable that it will not translate into panic in the market."

The Bank of England is also expected to reverse an earlier decision requiring banks to set aside extra capital to help with lending during an economic downturn, according to Bloomberg News. In March, the central bank told lenders to start building the so-called counter-cyclical buffer, which was supposed to become binding next year.

"There is little surprise they are considering easing on the requirement," said Prof. Gurdgiev. "In this environment, expecting counter-cyclical buffer accumulation would be the exact opposite of what this measure is designed to do."

After the financial stability report is released on Tuesday, Mr. Carney will hold a press conference.

Later in July, he is due to visit Toronto for a discussion on the environment. The central bank did not comment on whether the trip would be cancelled.

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