Glass half empty Rate cut brings some cheer but voters may not be satisfied

The return of spring weather across much of Britain last week brought glimmers of sunshine for the struggling UK economy too - including a confidence-boosting interest rate cut, with hopes of more to come.

- Heather Stewart

As Keir Starmer aims to seal a closer trading relationship with the European Union, he is urging voters to look "forward, not back". Yet even if some consumers start to feel the clouds are parting, it is unlikely to come soon enough to improve voters' dim view of the government, shown in the local elections. That may take a more radical rethink.

The Bank of England's interest rate decision on Thursday was welcome even if it was less than wholehearted, with two of the monetary policy committee's (MPC) nine members preferring no change (though two others wanted a bumper half-point cut).

The committee's more cautious members appear to have been restrained by fears of the dreaded second-round effects. These can translate a short-term inflationary surge, such as the one now coming our way as a result of rising utility bills, into a longer-lasting crisis.

Workers respond to price rises by bidding up their wages, the theory goes. That means higher labour costs for firms, which then pass these on to consumers in the form of higher prices - and so it goes on. Yet much of the MPC's narrative last week seemed to cut against this picture of the world.