The Bank of England have announced it is cutting the UK’s base interest rate to 4.5%. As a result, the cost of borrowing is expected to fall to its lowest point in more than 18 months. The base rate helps dictate how expensive it is to take out a mortgage or a loan, while it also influences the interest rates offered by banks on savings accounts.

UK stocks rallied to hit a fresh record ahead of the rate decision. The FTSE 100 is up 1.1 per cent — touching a fresh high — helped by weakness in the pound. The mid-cap FTSE 250 rose 0.7 per cent. Most sectors in the FTSE 100 were up,

London’s blue-chip index smashed through recent highs after experts said the Bank’s announcement gave it ‘a shot of adrenaline’.

Laurence Mutkin, BMO’s EMEA head of rate strategy, is worried that the Bank of England is going to focus too much on slowing growth when it updates the market today. He told Bloomberg TV earlier what the gilt market actually wants to hear is that Governor Andrew Bailey is laser-focused on inflation.