National mortgage broker Savills Private Finance is calling on mainstream lenders to cut their variable rates following today's announcement that the Bank of England is reducing rates to 3.75 per cent from 4 per cent.
But Savills says fixed rates are unlikely to fall immediately.
Associate director Simon Jones says: “The rate cut has not come as a complete surprise. There are clearly concerns over the underlying strength of the economy, with the stockmarket having fallen considerably since the start of the year.
“The rate cut should enable consumer spending to remain buoyant, despite concerns that a two-tier economy is emerging with manufacturing in the doldrums.
“We are urging lender to pass on the full savings from the base rate cut to borrowers. Despite the strength of the housing market over the course of the last year, the MPC appears to have accepted that house price inflation will return to sustainable levels of its own accord, and without the need for intervention.”