Do I have your interest?

I'm not much of a betting man but I'd have happily had a few quid on last week's interest rate cut, not that I'd have got much in the way of odds.

After the surprising decision to hold rates last month (almost certainly forced on the Bank of England by the fact that a new Chancellor had only been installed the night before the meeting, and the current system requires that 24 hour notice of a rate change be given to 11 Downing Street) last week's change was inevitable, but what are its implications?

Well, apart from the obvious body blow to cash investors and boost to those with mortgages, it has sent out the reassuring message to markets that the Bank recognises that, despite the current buoyant stock market levels, there are already signs of economic slowdown and that, rather than waiting for the picture to worsen, it is happy to apply stimulus now.

The problem, of course, is that with interest rates so low already, a further quarter point cut is hardly much of a shot in the arm, unless it is supplemented by a change of policy from the strict austerity programme of George Osborne. By boosting Government spending and investing in infrastructure Theresa May's new cabinet could look to stimulate economic activity, although the inevitable price of that would be to see the UK's debt level rise again.

This uncertainty means that markets currently look high and a correction seems to be overdue. Whether that would be the stimulus for a further upward surge or the start of a longer decline is very much up for debate, but I suspect that when, or indeed if, Article 50 is invoked we may have a better idea of what the longer term future holds for investors. Until then I think caution may be the best policy, particularly for those like myself are approaching the point where investments will need to generate an income.

Robin Sainty APFS M.A. (Cantab)