By Ross Finley and William Schomberg
LONDON (Reuters) - The Bank of England will probably wait until August to make any policy move to offset the hit to the economy from Britain's decision to leave the European Union, but the pound has more pain ahead, a Reuters polls showed on Tuesday.
Governor Mark Carney has said the economy faces a material slowdown after the shock referendum result and the BoE took steps on Tuesday to encourage banks keep lending.
One Reuters poll showed sterling - which sank to a new 31-year low against the dollar on Tuesday - would probably weaken by a further 3 percent on top of the 12 percent drop already since the June 23 vote, less than two weeks ago.
Reuters polls before the referendum predicted a significant slide in sterling as well as the kind of economic pain that the BoE is bracing for with its abrupt shift in stance.
After spending most of first three years at the Bank trying to signal when the BoE was likely to raise rates, Carney last week suggested more stimulus was likely over the summer as the referendum result raised fears of a possible recession.
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But it is debatable how much impact an additional cut to rates, which are already at a record low of 0.50 percent, will have on an economy facing lower investment, spending and potential trouble in Britain's expensive property markets.
"In our view, a rate cut in the coming months would be largely futile, however it does appear a very real possibility," said Oliver Jones, an economist at Fathom Consulting.
"The Monetary Policy Committee also seems likely to restart quantitative easing, with a possible expansion of the scope. Purchasing corporate bonds would be the most effective of the Bank's options."
Nearly two-thirds of 52 economists in a second Reuters poll said Bank Rate would remain steady at next week's meeting which concludes on July 14. Seventeen predicted a cut to 0.25 percent and another two saying rates will be chopped to zero next week.
Median forecasts show a single cut to 0.25 percent by the end of the July-September quarter, by which time the economy is expected to be slowing even more. Most economists said Bank Rate would stay at 0.25 percent until the end of next year.
The BoE is due to come up with fresh forecasts for the economy on Aug. 4 and it has traditionally timed big policy moves to coincide with those quarterly reports.
By the time of its August meeting, the BoE will have a better idea of the referendum result's impact on the economy.
Overall economic growth in the April-June period probably already slowed to just 0.2 percent in the quarter, according to financial data firm Markit, which publishes closely watched purchasing managers' indexes.
Asked more broadly how the BoE was likely to respond to Brexit, a majority of economists who answered the question thought a combination of lower rates and more asset purchases, or quantitative easing (QE), was likely.
The BoE first launched purchases of government bonds in the depths of the financial crisis in 2009, adding 375 billion pounds to the central bank's balance sheet, about one-fifth of UK economic output. It has not made purchases for four years.
POUND TO FALL FURTHER
The pound Reuters poll of more than 60 foreign exchange strategists forecast the battered currency has further to fall. It will tumble to $1.27 by year end, down more than 4 percent from Monday's close of $1.33.
Strategists as a whole expect a slight recovery to $1.29 by this time next year -- nowhere near the $1.50 it was trading at before the historic vote to quit the EU.
Forecasts were in a wide range, from $1.24 to $1.40 in a month, $1.17 to $1.48 in three months, $1.11 to roughly $1.51 in six months and $1.07 to $1.57 in a year from now. That last forecast compares with $1.26 to $1.65 just one month ago.
The most pessimistic forecaster, Bayern LB, downgraded their 12-month view by nearly 40 cents.
Against the euro, the pound is expected to perform almost as poorly.
The outlook for British currency will hinge largely on whether or not the UK can remain part of the EU's single market or has a less open trading relationship with the bloc.
The formal process for Britain to leave the EU has not begun as the ruling Conservative Party seeks to replace Prime Minister David Cameron. Talks about the future of Britain's ties to the EU could take years to complete.
"I think if the Brexiteers push to leave the EU single market we will see another round of heavy selling" of sterling, Angus Nicholson of IG Markets said.
(Analysis by Krishna Eluri and Purnita Deb; Polling by Purnita Deb, Khushboo Mittal, Sarmista Sen and Vartika Sahu Editing by Jeremy Gaunt)