The Guardian view on interest rate cuts: helpful for some, but costs are too high for too many | Editorial

Even after the base rate reduction, businesses and households will still be paying record sums to borrow

Beware the narcissism of small differences. On Thursday, the Bank of England cut UK interest rates by 0.25%, reducing the base rate from 5.25% to 5%. This is not a large cut. It was narrowly approved by a single vote, five to four, on the Bank's monetary policy committee. It is not expected to be the first of a cascade of similar reductions. It cannot therefore be claimed as marking a real turning point for Britain's economy.

Instead, the cut marks a milestone along the road and a cautious reversal, welcome as far as it goes, after four years of heightened rates in the wake of the pandemic and, in particular, the shock to energy prices caused by Russia's invasion of Ukraine. It follows a similar reduction by the European Central Bank in June. And it came a day after the Federal Reserve hinted that it could cut US rates in September.