Economic history is about to be made. We know this because none other than the governor of the Bank of England has told us as much. Speaking a few days ago, Mark Carney said: “The economic outlook has deteriorated and some monetary policy easing will likely be required over the summer.” You need no degree in Threadneedle-speak to decipher that: Mr Carney will cut interest rates, perhaps as soon as this Thursday. Remember that the all-important Bank rate is already at its lowest level since the central bank was founded in 1694. When Mr Carney’s predecessor Mervyn King dropped the key rate to 0.5% in March 2009 it was an emergency response to the collapse of the banks. The fact that his successor plans to cut further says plenty about the extraordinary headwinds the UK now faces. Yet slashing rates more will almost certainly not be enough on its own to ward off the threats that now loom over Britain.

What are those economic threats? They are, to use a Rumsfeld-ism, known unknowns. We can sketch out their scope; we cannot properly assess their scale. Not until the economic indicators published next month will we start to glean helpful clues about the sharpness of our downturn since the Brexit vote. Nevertheless, it is more than likely that Britain voted itself into a recession on 23 June; just how big and lasting depends a lot on what happens in the next few weeks and months. In the run-up to the referendum, multinational businesses would have held off from major investments in the UK. The vote, and the turmoil and uncertainty it has produced, will have poured further ice on those plans. Plants and distribution centres will stay stuck on the drawing board, pounds in budgets will go unspent. The investment slump alone will badly dent growth. Add to that the scenario well described by Mr Carney: “Households could defer consumption … lowering labour demand and causing unemployment to rise.” This without considering the financial instability that the Bank has been working to minimise. For each of these negatives, it’s hard to see a positive counterweight. About 60% of the UK GDP derives from consumption, and there is no way that a hit there will be offset by a boost to exports – not with the world economy so weak.

Put these factors together and the case for an imminent and large rate cut is incontrovertible. The Bank should drop rates, starting this Thursday. But while historic, even a cut would not achieve what might be expected in normal times. Interest rates are already very near what’s called the zero lower bound – the point at which cuts will not stimulate further growth. As for the Bank going in for more quantitative easing, £375bn has already been pumped into the financial system, benefiting the rich and pumping up London house prices. The real boost to growth will only come with a big burst of public spending on infrastructure, services and benefits – the areas that have suffered most under austerity. Theresa May has already talked about infrastructure bonds, but she will need to go a lot further than that. That may be ideologically uncomfortable for the Tories, now seeking ways to mitigate economic and social damage from the referendum they called. But they should consider the words of Mr Carney: “One uncomfortable truth is that there are limits to what the Bank of England can do.”