The Bank of England’s extraordinary 1.5 percentage point interest rate cut to 3 per cent is scary, justified and irrelevant. It is scary because it confirms the British economy may be headed for one of the biggest slumps since the second world war. It is justified in the sense that falling inflation rates give central banks sufficient room for manoeuvre. But unfortunately, it will not make much difference to the prospects of an economic recovery.

A stronger eurozone rate reduction by the European Central Bank, which cut by half a percentage point to 3.25 per cent, would also have been desirable and justified, but likewise irrelevant.