It was a momentous day. It was an historic day. And it was a ‘hold your breath and wait and see day’. Wednesday 8 October 2008 will either be remembered as the day that saw the wheels of the UK economy start turning again after a few hairy weeks or the day that proved the wheels are about to come off. My belief is that the threat of meltdown has been lifted. The combination of massive taxpayer funded support to UK banks and a substantial co-ordinated cut in global interest rates is the right medicine. But it may take some time to work. And like all good medicine it will leave the patient feeling queasy before signs of rude health reappear.

By coincidence, news that the Bank of England was acting jointly with central banks around the world to reduce the cost of borrowing broke just as my CIPD colleague and I were arriving for a private lunch at a major City bank. The sense of occasion was palpable. Yet perversely, it soon became clear that the stimulus had not triggered an instant bounce in the London stock market. Was this evidence that the medicine was already being spat out? An immediate slap in the face for Gordon Brown and Alistair Darling, as one frenzied commentator put it? Not so. The markets were simply responding to the fact that the day’s events were signalling the seriousness of what everybody already knew – the global economy is slowing and times will be very tough for a while. Hardest hit were shares in energy and commodities companies which, having profited during the boom, are facing somewhat leaner times as demand for resources weakens. But, rather than being bad news, this is great news for most of us. An easing of fuel and commodity price inflation means businesses and consumers will soon start to feel less of a squeeze on their balance sheets and in their pockets. This in time will not only offer a further boost to the economy to magnify the impact of the latest interest rate cut but also creates scope for more rate cuts in the next few months.

We are not out of the woods yet. There will be dark days to come with major job losses and much hardship along the way. But I think today will in due course come to be seen as the moment that prevented what now seems to be the inevitability of recession in the United States, Britain and much of Europe from spiralling into a much more serious depression - and sowed the seeds of eventual economic recovery. Three cheers for a ‘wizard Wednesday’.