The Council of Mortgage Lenders has welcomed the decisive move by the MPC to reduce the Bank rate to 3%.

CML director general, Michael Coogan, said: “This is a strong and decisive move by the Bank of England. They have grasped the nettle in a worsening recessionary environment.

“What is important is how this feeds through to lenders’ borrowing costs- and lenders will need to balance the interests of savers, as well – but such a sharp downward movement provides more room for lower borrowing costs more quickly.”