Faisal Islam
Economics editor

The clear message today was not to expect a consecutive series of cuts from here.

While there may be scope for a further reduction this year below 5%, perhaps in November, the governor of the Bank of England wants to avoid cutting “too quickly or by too much”.

Inflation is expected to creep back up from the target of 2% over the next few months.

Inflation in the service sector – which covers things like hotels and restaurants – remains high, as do wage settlements, although both are beginning to calm.

The Bank was briefed early on most of the chancellor’s spending announcements, including the above inflation public sector pay settlements. So far they seem relaxed, with insiders suggesting that it is private sector wages that set the benchmark for public sector ones, not the other way around.

The inflationary dragon is on the retreat, but is not yet totally vanquished.

One rate cut has been delivered, and they will slowly tiptoe their way to some more cuts over the course of the next year.

“Enjoy your summer, but don’t go wild”, appears to be the message to Britain’s consumers.