In a statement this morning, Abbey announced: “Further to the Bank of England’s decision to cut base rate by 1.5 per cent, Abbey is passing on the full rate cut to all its existing customers on variable rate mortgages.

“This includes customers on SVR tracker rate mortgages and flexible offset deals. These customers will see their rates cut, as usual, from the start of December.”

The Abbey mortgage standard variable rate will fall from 6.94 per cent to 5.44 per cent and Lloyds TSB’s C & G mortgages will fall by 1.5 per cent.

Commenting on the Lloyds TSB announcement, mortgage expert at Moneyfacts.co.uk, Darren Cook, said: “I am sure that most mortgage lenders were bargaining on no more than a 0.50 per cent cut in base rate.

“More announcements will be on hold to enable additional number crunching to take place to see if they can afford to cut rates. With interbank lending still high, but falling steadily, I will be surprised if many lenders choose to pass on the full benefit.”