Will falling interest rates save Rachel Reeves?

There is not much that Chancellor Rachel Reeves can look forward to right now. The Labour party has just been hammered in the local elections. The economy has stagnated, and government borrowing has started to spiral out of control. There is, however, this: the City now expects interest rates to start falling at the fastest pace since the financial crisis a decade and a half ago. There is just one catch: it probably won’t be enough to save Reeves’s failing chancellorship.

The Bank of England is widely expected to cut interest rates from 4.5 per cent to 4.25 per cent next week. Even better, the consensus among City forecasters is that we will see a series of rate cuts over the next six months that will bring rates below 3 per cent by the end of the year. It will be the most rapid series of cuts since the crash of 2008 and 2009.