Bailey should follow the ECB with the Bank of England’s first rate cut, says ALEX BRUMMER

Are you watching, Andrew Bailey? The European Central Bank (ECB) is not known for its daring. But after five years of keeping its key interest rate at 4%, it decided that credit conditions were too tight and cut rates by a quarter of a percentage point to 3.75%.

It set aside concerns that consumer prices remain high, wages continue to rise and service sector costs are high.

To underline the courage of bank president Christine Lagarde’s decision: the decision came on the day that Dutch voters were the first to go to the polls in the European Parliament elections in 27 countries.

This demonstrates the political independence of the Frankfurt-based bank.

The ECB joins a cadre of Western central banks, including Canada, Sweden and Switzerland, who view the fight against cost-of-living pressures caused by Covid supply chain bumps and Russia’s war on Ukraine as over consider.

Indeed, signs of weakness are emerging in the global economy, pushing the price of Brent crude oil down to $77 per barrel.

All this should give Bank of England Governor Bailey and her Monetary Policy Committee (MPC) license to quickly cut interest rates from the current 5.25% to 5% on June 20. If she wants to follow the IMF, she must continue her work. advice and reduce the rates to 3.5% this year.

Overall inflation is on track, from a peak of 11% to 2.3%. Both the housing market and retail sales are being suppressed by unnecessarily harsh rates as the MPC overcorrects for its past mistakes.

A cut during a heated election campaign would underline the Bank’s independence. It would be damaging to the country if a necessary rate cut were postponed for fear it would be seen as an advantage for the governing Tories.

A cut would ensure that the recovery of the first quarter of the year is not offset by monetary machismo.

Chip bait

Huge excitement over chipmaker Nvidia’s valuation rising to $3 trillion (£2.3 trillion), making it more valuable than the stylish, ubiquitous Apple.

The surprising aspect of Jensen Huang’s artificial intelligence (AI) pioneer is that he is a component supplier and not a product supplier in the manner of Apple or electric car star Tesla.

Nvidia is not a name that rolls off the tongue at the Pig & Whistle or while scrolling through Tinder.

When we think of motorcycle brands or Dyson hairdryers, the names of component manufacturers do not come to mind. AI has become the technology of the moment and is seen as transformative in every aspect of life, from making the NHS function better to accelerating trading in the financial markets.

Other potential champions, such as Cambridge-based Arm Holdings, may have the intellectual capacity but have not been effective challengers, leaving Nvidia dominant. It has essentially become the 21st century equivalent of standard oil.

A world obsessed with mobile devices and laptops will never be satisfied with the second best technology. The only thing we can hope for when we buy a new mobile phone is a more user-friendly design or a better camera.

With the first AI chips being embedded in our phones and laptops, there will be a quantum leap forward.

Imagine how much faster Tinder will be updated, or if any of Labour’s 40,000 extra hospital appointments could be achieved.

That’s why Nvidia’s hype makes so much sense.

Rainmakers

An honorary knighthood for the celebrated hero of American banking, Jamie Dimon, is almost certainly deserved.

There may be doubts in some quarters about his unhelpful comments on the impact on Brexit and his cultivation by French President Emmanuel Macron (a former Rothschild banker).

Still, it won’t hurt Rishi Sunak or Chancellor Jeremy Hunt’s post-election prospects.

There is a long tradition of former chancellors being catapulted onto bank boards. The late great tax cutter Nigel Lawson went to Barclays.

Labour’s Alistair Darling joined Morgan Stanley. And Sajid Javid has returned to JP Morgan.

Let the doors spin.