Bank of England Governor Mark Carney said today that the expected hit to Britain's economy from last month's decision by voters to leave the European Union could prompt the bank to provide more stimulus.
"There always could be monetary response," he told UK politicians.
Mr Carney has previously given a more explicit signal of action by the Bank of England to cushion the impact of the Brexit vote.
On June 30, a week after the referendum, he said he expected the Bank to pump more stimulus into the economy over the summer.
Mark Carney and his fellow members of the Bank of England's Monetary Policy Committee are meeting this week, meaning they are not supposed to talk about the outlook for interest rates in detail.
The bank is due to announce whether it will cut rates or take other action on Thursday.
Sterling rose over 1% against the US dollar earlier today - buoyed by the earlier-than-expected appointment of a new British prime minister.
It added to earlier gains as Mark Carney and other Bank of England officials spoke today.
In his appearance in parliament, the Bank of England chief also said some of the criticism of the central bank in the run-up to last month's EU membership referendum had been "extraordinary in all senses of the word".
Mr Carney said he did not decide in advance what position the Bank's most important policy-making committees should take on the referendum which resulted in a decision to leave the bloc.
"I did not prejudge the minds of those policy committees, nor could I. That's not the way the system works, that is not the way the system is set up," he said.
Before the referendum the Bank's Monetary Policy Committee said a Brexit vote could cause a material slowdown in the economy.
Carney said in May there was a chance of a recession, angering some leading "Leave" supporters.
Echoing this, the chief investment officer of BlackRock, the world's largest asset manager, said today the UK will fall into recession over the coming year.
