Base rate cut to 2%

The Bank of England has slashed interest rates by a full percentage point to 2%, taking them to their lowest level since 1951.

The move follows last month's shock 1.5% cut and means base rate has plunged 3% in the last three months.

It now remains to be seen which mortgage lenders decide to pass the reduction on to their customers.

Lloyds TSB, which also lends under the Cheltenham & Gloucester brand, promised to pass on any cut in full to its standard variable mortgage rate before the announcement had been made.

Halifax has also said that its existing tracker mortgage customers will benefit from the full 1% reduction, overriding a clause in its mortgage arrangements saying it doesn't have to continue cutting its rates once base rate falls below 3%.