Mark Carney, the governor of the Bank of England, has described the outlook for financial stability in the UK as "challenging" in the wake of the referendum vote to leave the European Union.
The bank eased special capital requirements for banks in a move that potentially frees up £150 billion for lending as a hedge against a possible economic slowdown caused by a Brexit.
"This is a major change," said Mr Carney. "It means that three-quarters of UK banks, accounting for 90 per cent of the stock of UK lending, will immediately have greater flexibility to supply credit to UK households and firms.
"Today's action means that UK households and business who want to seize viable opportunities in a post-referendum world can be confident they will be supported by the financial system."
The bank has announced a raft of measures since the referendum in a bid to boost confidence in the future of the economy and Mr Carney insisted, "The bank has a clear plan. We are rapidly putting its main elements in place. And it is working."
While the governor did not repeat his earlier warning of a possible recession, the bank's latest Financial Stability Report stated, "There is evidence that some risks have begun to crystallise. The current outlook for UK financial stability is challenging."
It said there were risks already apparent in the commercial property market, with foreign investments falling by 50 per cent in the first three months of 2016.
Chancellor of the Exchequer George Osborne described the decision to loosen rules for lenders as an "important move" and announced that he would shortly be meeting with major banks "to discuss response to referendum result". He added, "We need great national effort to steer UK through."
The Financial Stability Report said there would be a period of "uncertainty and adjustment" as a result of the referendum vote, adding, "It will take time for the UK to establish new relationships with the EU and the rest of the world."
The bank's moves came after publication of the latest Markit/CIPS purchasing managers' index (PMI) for the UK's all-important services sector, which showed that growth had slowed down last month ahead of the referendum.
The PMI stood at 52.3 in June, down from 53.5 in May in an index where a reading above 50 represents growth.
Chris Williamson, chief economist at Markit, said, "The PMI surveys indicate that the pace of UK economic growth slowed to just 0.2% in the second quarter, with a further loss of momentum in June as Brexit anxiety intensified.
"Hiring has also clearly been hit as firms lack clarity on the economic outlook. Business optimism in the vast service sector is down to a three-and-a-half-year low.
"A further slowing, and possible contraction, looks highly likely in coming months as a result of the uncertainty created by the EU referendum.
"However, with the June PMIs having already fallen into territory that would normally be associated with the Bank of England cutting interest rates, it's unlikely that policymakers will wait for more data before unleashing additional monetary stimulus. More policy is therefore likely in the coming weeks."
David Noble, group chief executive of the Chartered Institute of Procurement and Supply, commented, "Uncertainty continued to weigh on the service sector in June with impacts reported on new business and the lowest optimism for future activity for three-and-a-half years.
"The majority of respondents completed the survey before Brexit and attributed these effects to both a general slowing in the UK economy and a pause in normal economic activity as customers and business awaited the results of the EU referendum.
"These subdued figures are a wake-up call to policymakers that fast, decisive action is necessary to prevent further slides in confidence and activity in the key service sector and, by extension, the overall economy."
Read analysis of what the vote to leave the EU may mean for for the global mobility industry in Brexit is a reality – a new era for global mobility? by Relocate Global's managing editor, Fiona Murchie.
©2017 Re:locate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.