Andrew Bailey, Governor of the Bank of England, announced that interest rates were changing from 4.25% to 4%.

It’s been a long time since it felt like the British economy was in a good place.

Covid, followed by the cost of living crisis and then the Labour government’s repeated warnings about how there was no money left means life in the UK has ended up feeling a little... glum.

So the Bank of England’s decision to cut interest rates – the cost of borrowing – from 4.25% to 4% today seems like cause for optimism.

Interest rates are used as a lever by the Bank to keep inflation, which is the rate at which prices change over 12 months, close to the government’s target rate of 2%.

The current inflation rate is at 3.6%, which is still above its goal rate, because the Bank decided there has been “substantial disinflation over the past two and a half years”.

Chancellor Rachel Reeves said she “welcomed” the news, especially as interest rates have come down five times since Labour were elected last July.

She said this was due “in part to the stability that we’ve managed to return to the economy” after the difficulties of the Tory........

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