However, the continuing solid expansion in household disposable income, which has risen by about 7 per cent over the past year, has no doubt also been important. Measures of business confidence are a little below average at present, even though business conditions are around average levels.
Progress has been somewhat more rapid than we had expected, in part due to lower food prices and an exchange rate recovery, which helped to bring down underlying inflation. That has created extra space to lower the repo rate. With the January MPC cut, the repo rate is now down to 6.25%, its lowest level since 2015.