The Monetary Policy Committee's decision to cut the Bank of England interest rate from 4.75 per cent to 4.5 per cent at its 100th meeting was, by intention, probably the most universally expected move in the MPC’s eight-year history.

The monetary debate has already moved on.

The issue is whether this can already be taken as the first in a new series of cuts designed to reawaken the economy or should be viewed just as a precautionary one-off, to make sure growth does not slip too far while consumers and homebuyers were wondering whether to go back into action.

The Halifax, Britain's biggest mortgage lender, cut its main mortgage lending rate within a few minutes of the Bank of England's move, suggesting that HBOS, the Halifax's parent, reckons that after two years, the interest rate trend has decisively turned.

Homebuyers will hope it is right.

Any interest rate cut is welcome to borrowers, if not savers. But a quarter point cut, even from an historically low peak, will only cut current mortgage interest dues by 5 per cent.

For credit card borrowers and most businesses, the impact is negligible. Any impact on the sterling exchange rate had happened in advance.

The prospect of a series of rate cuts would be quite different. Homebuyers could go ahead in the confidence that nothing nasty was likely to happen in the first year or two. Consumers would feel safer in their jobs.

Rate cuts can seem almost like a licence to spend and rack up more debt. Industry could plan on the basis that the pound was likely to become more competitive over the next year.

In the City, economists and traders are already looking for two or three cuts, perhaps taking the rate down to 4 per cent. Unless oil prices stoke inflation, however, there is no limit to cuts if they are necessary to stop the economy settling into stagnation.

More cautious voices note that consumer borrowing, on mortgages and on credit cards, is till rising at 10 per cent a year. Yet homebuyers are still thought to be on the edge of their ability to pay and bad debts are already accumulating from credit cards.

The last thing the Bank wants is to reignite a house price boom. Unemployment is about as low as it can get without causing labour shortages so a period of slower growth makes sense, so long as it is not too slow.

Both consumers and financial markets should be watching next week’s Bank of England Inflation Report and the minutes of yesterday’s meeting a week later to see which argument is more likely to prevail.

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