Lenders To Pass On Rate Cut
A number of mortgage lenders including Lloyds TSB and Barclays have promised to pass on today's 0.5% interest rate cut in full.
Lloyds was among the first lenders to say it will pass on the cut
RBS and Halifax have also said their customers will benefit from the shock move by the Bank of England.
Others - including Abbey - are still reviewing their rates for borrowers and savers.
The European Central Bank, the US Federal Reserve and central banks in Canada, Sweden and Switzerland have also reduced the cost of borrowing.
Its emergency half-point cut to 4.5% is the biggest since the September 11 terror attacks in 2001.
It will mean a saving of £47 a month on a £150,000 mortgage - where the reduction is passed on in full by lenders.
Bank of England policymakers had been under growing pressure to act as fears grew about the economy.
They had kept rates on hold at 5% since April to keep a lid on inflation - which reached 4.7% in August, more than double the official 2% target.
A statement from them said that was now less of a concern following the "recent intensification" of the financial crisis.
The statement added: "Data released over the past month indicate that the outlook for economic activity in the United Kingdom has deteriorated substantially."
The 0.5% rate cut has been welcomed as "essential and timely" by business leaders.
The CBI said it "would be welcomed by business, and will help the economy at a critical time".
The British Chambers of Commerce, which this week warned the UK was already in recession, said it was "thrilled" by the "bold and necessary step".
A spokesman for the British Retail Consortium said: "A significant rate cut was necessary to restore confidence while stimulating the High Street."
There have been growing calls for a rate cut from businesses which have been hit hard by the squeeze on lending.
Unemployment has soared in recent months, along with fuel and food prices.
At the same time house prices have tumbled, bringing the property and house building markets to a virtual standstill.
Courtesy of Sky News
