Threadneedle Street is being cautious but cuts will come

Bank of England policymakers might be on a "go-slow" as they look forward to interest rate cuts this year, but the direction of travel is almost certain.

- Phillip Inman

After a meeting yesterday where rates were kept on hold at 4.5%, City investors bet there would be more reductions in the cost of borrowing this year, probably two cuts reducing the rate to 4%.

And the signal from the Bank - with its resolve to bring the cost of borrowing into line with economic growth - should be enough for businesses and households to take a more confident view of their own and the nation's prospects.