The Bank of England has cut the base rate by a full percentage point, down to 2 per cent.

Following last month’s 1.5 per cent cut, the base rate is now at the lowest level since 1951.

The move has been welcomed by many analysts, with Hetal Mehta, of the Ernst & Young Item Club calling it the “right medicine at the right time.”

But others are unconvinced that another rate cut will actually benefit people, given that many lenders have not passed on the last one to borrowers but have still slashed savings accounts rates.

James Caldwell, director at Fairincvestment,co.uk said that so far, it seems the rate cuts have been ‘in vain’ and warns that unless lenders pass the rate on to mortgage holders, nothing will change.

“Lenders need to act fast this time, because there is only so much the Bank of England can do – this latest cut must be passed on,” he said.

And Peter Bolton King, Chief Executive of the National Association of Estate Agents said “this cut, in reality, won’t do enough unless the banks play fair and pass the cut on to the homeowner.

“The NAEA is, once again, calling on all of the major lenders to commit to passing these savings onto the consumer.”

But Ben Thompson, Mortgages Director at Legal and General says the cut will put lenders who also offer savings in a difficult position.

“How pleased should we be by today’s rate cut announcement?” he said.

“Falls in interest rates ought to prove beneficial, and there is no doubt over time they will help. However, there is the urgent ongoing requirement for many lenders to further build their retail savings base.

“Some lenders will reduce their SVR’s by the full amount, but unfortunately, the challenge of building their savings base may limit the extent to which lenders will directly pass on the rate cut to all borrowers.”

However, some lenders have taken this latest cut seriously – Lloyds TSB has already released a statement saying it will pass on the cut, while Halifax said its customers with existing tracker mortgages that follow moves in the Bank of England’s Base Rate, would benefit in full from any cuts.

“Lloyds TSB and C&G; will pass on today’s base rate cut in full to existing variable and tracker customers, following the decision by the Bank of England to cut base rate by 1 per cent,” said Lloyds TSB.

However, Council of Mortgage Lenders has warned that borrowers should not be surprised if the cut is again, not passed on.

“Mortgage lenders are trying to achieve a range of potentially conflicting objectives at the same time,” explained CML director Michael Coogan.

“They are simultaneously trying to build up greater levels of capital and liquidity, help borrowers in difficulty and reduce repossessions, keep rates as low as possible for borrowers and as high as possible for savers in a very low interest rate environment, support new lending, and pay the significant costs of the recapitalisation scheme which have fallen across a wider range of lenders than just the recapitalised banks themselves.”

He said it is “not realistic to expect them all to react in the same way to the rate cut” but said that where lenders believe they can cut mortgage rates, they will.

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