The Bank of England turned the page on an extraordinary (and extraordinarily painful) chapter in its long and storied history on Thursday when, by the slimmest of majorities, the MPC cut rates for the first time since the pandemic.

The decision, like the last meeting, was described by Andrew Bailey as “finely balanced,” a characterization reflected in the 5-4 vote split. All four dissents preferred to hold Bank rate at the highest since 2008.

Among developed economies, the UK arguably (I actually don’t think it’s debatable) had the toughest time post-COVID. The pandemic shock was exacerbated by the war in Ukraine and a domestic political fiasco for the ages. The country’s cost of living crisis was, at one juncture, dangerously acute and the volatility observed in gilts in and around Liz Truss’s star-crossed tenure at No. 10 very nearly triggered a domestic financial meltdown.

It’s easy enough to deride the BoE for failing its mandate and indeed the public did. The bank’s approval rating turned negative in recent years for the first time in history. But if we’re honest, there wasn’t anything they could do. The situation was well beyond the capacity of monetary policy to address. They tried, though, hiking rates 14 times in a row and risking a deep recession in the process.

If you could travel back in time to 2019 and show the chart above to policymakers, they’d have an anxiety attack of some kind: “Dear God, what’s about to happen to us?!”

In a short video address accompanying Thursday’s decision, Bailey gave himself some credit. “Over the past couple of years we have raised interest rates to slow down inflation. It’s working,” he told the public. “Inflation has fallen a lot over the past 18 months.”

Yes, it has. In fact, headline CPI’s back to 2%. But as Bailey readily conceded, the decline in overall price pressures is attributable in no small part to “the fading impacts of global shocks.”

The UK isn’t out of the proverbial woods yet. Services inflation is still running very warm. The August statement acknowledged “the prevailing persistence of domestic inflationary pressures.” Even headline CPI’s likely to pick back up over the second half of the year as energy-related base effects fade.

The new forecasts show headline price growth peaking (or re-peaking, I guess) at 2.7% in Q1 of 2025, before receding below target a year later and staying there (i.e., remaining below 2%) through the end of 2027.

In the statement, the BoE mapped out its base case. “The Committee expects the fall in headline inflation, and normalization in many indicators of inflation expectations, to continue to feed through to weaker pay and price-setting dynamics,” the MPC explained, adding that as GDP recedes below potential, the labor market should “ease further.” Eventually — which in this case means “over the next few years” — domestic price pressures will “fade away” in part “owing to the restrictive stance of monetary policy.”

So, there it is: The plan. Or, perhaps more aptly, the “best laid plans.” (Caveat emptor: Gang aft agley.)

The BoE will probably cut again by the end of this year, noncommittal forward guidance aside. Bailey was outwardly cautious. “The risks of higher inflation remain,” he said Thursday. “We need to make sure inflation stays low.”