The quarter-point by the bank of england 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%.