Bank’s base rate gift signals wage rise conflict is on the way

Commuters on a train. Redundancies are growing and unemployment is rising. Photograph: Homer Sykes/Alamy

A reduction in interest rates by the Bank of England should rank as a joyful summer gift to borrowers weighed down by the high cost of mortgages and loans.

Yet the latest quarter-point cut to the cost of borrowing, from 4.25% to 4%, is laced with so many warnings that any celebration will be muted.