Property Renovations Ely Ltd

The quarter-point cut is the third since December and comes amid signs of gathering economic gloom, with figures earlier this week showing that house prices fell 2.5% last month - the biggest monthly drop since the property crash of the early 1990s.

The decision will be a welcome boost to cash-strapped borrowers, already under pressure from soaring inflation. Monthly repayments on a £100,000 mortgage will fall by £16 if lenders pass on the cut in full, reducing them from £722.80 to £706.77 a month, based on a new rate of 7%.