Mortgage rates will finally start to come down again. Consumers will have a little more money in their pockets. And companies will find it cheaper to invest. Today’s cut in interest rates was a much needed boost for the economy. Oh, but hold on. That was over in Switzerland, where the central bank this morning cut rates by 0.25 per cent. By contrast, the Bank of England has today kept them on hold.

This raises the question of whether the Swiss or British central banks have a better record of managing monetary policy. If most people in the markets had to put money on it they would probably place a franc or two on Switzerland.

The Bank of England has blundered all over again – and the price for that will be a high one

This may well prove to be just the beginning. The Swiss National Bank (SNB) today became the first of the major central banks to decide that the battle against inflation had now been won, and that the time had come to start reducing interest rates again. They lowered their rate to just 1.5 per cent. The Federal Reserve in the US has also discussed cutting rates, but they are still on hold. The European Central Bank is also likely to sit on its hands today. And of course, here in the UK, the Bank of England decided it was too early to do anything, and kept rates as 5.25 per cent.

True, the Swiss may be behaving recklessly, stoking another bubble and risking inflation running out of control. And yet, over time, the SNB has had a far better record of getting monetary policy right than the Bank of England. In the latest inflationary cycle, inflation in Switzerland peaked at just 2.1 per cent over the course of 2023, compared with a peak of more than 8 per cent here in the UK. The increase in the price level in Switzerland from 1960 to 2023 is 331 per cent, according to World Data. Over the same period in the UK it is 2,052 per cent.

Meanwhile, the Swiss franc keeps on out-performing the pound, as it does almost every other major currency in the world. Four decades ago, one pound bought you three Swiss francs, whereas today it will get you only slightly more than one. And of course, you don’t need to spend very long in Zurich or Geneva to figure out that the Swiss are very well off.

The verdict is surely clear. The Swiss are better at running monetary policy than we are. Their central bank has worked out that higher interest rates have already done their job, that price pressures are easing around the world, the money supply is in freefall, and that the real risk right now is that central banks push economies into recession. With the economy flatlining, consumer spending weak, unemployment starting to edge up and vacancies falling, that is even more true in the UK. In reality, the Bank of England should have cut rates today. It has blundered all over again – and the price for that will be a high one.