The problem here is the complete lack of sense in financial markets. Most of the people in this country have to balance a cheque book at the end of each month. Not so it appears the banks that hold our money. I grant this is an oversimplist view, but perhaps simplicity and transparency is needed.

TonyH, Telford,

People who took on too much debt should stop whingeing and get into the real world. Cut back on all expenditure sort themselves out. Once that is done start saving for the next rainy day. If it werent for the savers they would not be able to borrow at all. Banks should look after the savers first .

Paul , Ringwood, England

Northernrock reduced my mortgage by 0.1% for the recent rate cut of 0.5%, so I am getting really excited with a further 0.3% on the cards. Perhaps the state owned Northernrock only has to pass on a small percentage of the rate cut to its unwanted customers.

Ray, Rayleigh,

Don't know what people are complaining about.
Abbey had the highest rate. Lloyds is a major lender.
So the cat is out of the bag and lenders will pass on reduced rates. Nationwide and HBOS have the lowest variable rates so they can't pass on the full rate cut. They will probably reduce by 1%.

Annabel Schneide, London, UK

You people are amazing. Reducing interest rates to 3% is just going to fuel inflation. It will be the 1970s again - the pound will fall, prices will rise, inflation gets out of control, soaring unemployment lines, house repossessions, debts , and people savings in cash will get wiped out. New Labour

bob, London,

Nationwide has dropped its savings rate on ebonds by 0.5% overnight despite stating on its website no changes until 1st December.

Richard, Torrevieja,

Given events which have happened since Northern rock were privatised I find it outrageous they are allowed to keep charging the highest rates in the market. Darling darling should have the power to tell Northern rock to stop stripping money from the poorest in our community. We own a bank who are happily fleecing us mortgage payers. A national disgrace and certainly doing more damage than good

Gary, Saltash, England

I think banks are right not to be passing the cut on. They should be taking all measures to improve their balance sheets and reduce the chance of another Northern Rock.

What people on here aren't grasping is that lower mortgage rates = banks losses increase = another bank needing taxpayer bailout

Dylan, Rossendale,

Time for government to close the banks and create a national bank, that serves its country not its shareholders!!!!

Jd rose, Gt Torrington, uk

I think it should law that banks have to pass drop to customers(at least adecent 5 of it) - yet again NR customers still left between ROCK and hard place - yet NR can give new customers mortagages but not old cutomers - wot a con it makes me want to cry sometimes when will NR be stood upto???

fiona mcdermott, chesterfield, derbyshire

Taxpayers helped bail the banks out of the problems they themselves created - ultimately helping them survive and when the bank of England tries to help the taxpayers out by reducing rates these same callous banks demonstrate just how greedy they are. Congratulations Lloyds - let the rest sink.

John, London, UK

Lets fight debt with more debt.
Savings drop in value.
When is Gordon going to bail out the savers.
Although, even after a lot of political hot air from Labour, those with a mortgage haven't been helped, and probably never will be.

Np, England, UK

Please can the government now focus on making it less expensive to employ people?

s wall, Grimsby,

You work hard.. Save for a rainy day, pay off as much of the mortgage as possible and then because of the greed of others, your savings offer little return..
Would have been easier to live it up, get a council house and relax..

hamad Lone, London, England

interest rates may be down to 3% but i assume that the banks also have to take into account LIBOR as alot of loans and mortgages are funded by interbank lending.

also even if the banks only pass on 2/3s of the cut that still equates to a !% decrease in the cost to the consumer.

will, grimsby, uk

Jo Cilia,

Socialist Government? Oh, yes, a Government that has kow-towed to business and the rich , a Government that Thatcher said was somewhat Thatcherite (the ultimate insult), a Government that has allowed the 'greed is good' philosophy back? This was a Conservative Government in ALL but name

Alan Davidson, bournemouth,

Great. So the Government bails out the Banks incompetence with tax money. Then the Bank of England cuts rates to try and help everyone out of the mire the banks have created.
The banks response is to pull every tracker deal so they don't pass on the drop in rates and now no one can get a mortgage.

Thalia, london,

Of course the banks wont pass the savings on. The govt cant be seen to always bail out the banks. This way the banks hoard the cash, the govt look like the peoples champion by tut-tutting at the banks but eventually the system balances and the banks lower rates/base rate goes back up. Genius!

Steve Nelsons, Clapham, London

Start a run on the banks that don't pass the cut on. Who need who more. A warning to all the banks who hold our money in savings. You need us as much as we need you. With concerted effort from every person who has a mortgage with all lenders who don't pass the rate on start applications now

Simon O'Connell, Heswall, UK

The rate cut is welcome but it should be accompanied by action to reduce Libor. As is the cuts will stimulate high street spending but do little to reduce mortgage costs.

Genuine economic recovery will not take place until confidence is restored and the housing market back in equilibrium.

Tony Cook, Colchester, Essex

The carnivorous greed of the banks started this whole mess in which we now find ourselves and, guess what, NOTHING has changed. "Pass on the rate cut to the customer? Don't be ridiculous, there's money to be made!" At the very deepest, dankest, inner core of this global problem lie "The Banks"

Richard, London,

It seems that under a Labour government, the pensioners who saved for a rainy day and had not borrowed to the hilt are being penalised by lower interest rates on their savings, high inflation, ever increasing taxes and a falling pound. The sooner we get rid of this socialist government the better.

Joe Cilia, Kingswood, Surrey

Desperate measures to try and keep the bubble inflated.

The longer this goes on for, the bigger the bang when it does pop.

Only an idiot would borrow money now to buy a house - no matter how cheap the debt. The falling asset-value will far outstrip the reduction in interest payments.

H, London,

Why doesn't the BOE cut out the middlemen altogether and just issue it's own Mortgage backed securities? 25 year bond would keep savers and borrowers happy, only the Greedy Banks (what exactly do they do?) would lose out.

Chris, London,

Open the banking system to the German banks.

Mark, Yorkshire,

Yet again those of us who have lived frugally and saved for a rainy day find that our savings are being destroyed to bail out the financially irresponsible.

Paul, Coventry,

Why did Mr Brown give away so much of the taxpayers money to the banks in the first place ?. like any other bad business that cant stand on its own 2 feet he should have let the greedy "'"$£%^& go bust. They clearly dont care about the UK or the people in it.

tony, chingford, united kingdom

Well why not do nothing at all then M Steele? These pages are continuously littered with doom preachers, do you wait for a down turn and come scuttling out? Everyone knows things are bad, let's hear some suggestions on what to do next - now that would be interesting...

G Brown, London, UK

Well, since I took out a base rate tracker mortgage at 0.59% above BOE base rate in October, the cumulative 2% drop in the last 2 months sees me better of to the tune of £200 month. This £200 is going straight into RBS shares to cover us in the long run!

adam, belfast,

Just postponing the inevitable, God help anyone that takes on any further debt on the back of this decision. The BCG lifecycle matrix for measuring growth would define this move as an attempt to extend the cycle of growth, problem is what do we do when growth falls again and we're out of rate cuts?

James, Horsham,

I think that borrowing costs should have been reduced to 1% in the UK a long time ago. At 3%, they're still too high and I fear that central banks across the globe are decidedly behind the curb. Worries about short-term inflation are irrelevant at this point.

William, Pacific Palisades, California, USA

Theres only so many times you can keep blocking the hole on a sinking ship.....

Debbie, UK,

As a saver, this move will impact my income and reduce my expenditure by constraint. I am sure I'm not alone. I question the logic and doubt if this will be sufficient to waylay fears of job losses and increasing costs.

colin, wolverhampton, uk

Gordon Brown has asked the banks to pass on the interest rate cuts, yet has not lowered the rates of Northern Rock. It seems outrageous to me that I am required to pay 7.34% by Northern Rock - the government has control over when the base rate is 3%.

Simone, Burgess Hill, UK

Mark, Newbury. Changing to another currency is not an option with the pound at its present level.

Barry, Belfast. My savings did not fall out of the sky. I had to work hard long hours and do without the luxury and comfort items which many borrowers are buying with my money.

Richard, Alicante, Spain

This is quickly turning in to a disaster for Brown. The banks now have billions of pounds of taxpayers money, yet they are not going to pass on savings/
So Mr Brown, other than allowing the bankers to collect their huge wages/bonuses what exactly have you achieved?

Mark, Hampshire,

The government should relax it's rules on the number of customers Northern Rock can have. The other banks will soon drop their rates when they see people fleeing to NR for a mortgage.

Arthur, Newcastle,

I'm a saver, but can see a bigger picture. I don't want my gains to be at the expense of those in society already struggling. This may explain why I don't work for a bank.

Mark, Wadhurst, UK

Can someone please, please write an article on the mechanics of how base rate affects the cost of borrowing to banks? Why did Libor follow BBR for so long in the first place?

And why can't the nationalised banks start lending at base rate, to force the other banks to respond?

Andrew, London,

If enough people refused morgage payments until the rate cut is passed on the problem would be the lenders rather than the payees!

Nick, Leicester,

The Govt prop up the Banks to the tune of £37bn of tax payers money and they refuse to cut thier SVR in line with the BOE. urther evidence that 'Banksters' are a law on to themselves.

The poor continue to get poorer and the people who made millions of our backs 'Banksters' continue to get richer

Bal, Reading,

My mortgage is shortly up for revision, now that I'm at the end of a two year interest-only period. If HSBC don't pass on this cut to me, I'll go to someone who does. It's all about the bottom line for us too!

Gareth, Cambridge, UK

a) the rest of the world is doing the same so no reason to move savings.
b) this will help first time buyers buy houses again and the people who can't afford their mortgages.
So, choose between
1) more money for savers (inc myself) or
2) lower payments for less fortunate

I go for 1

Chris, Preston, UK

What is the use of the BOE controlling interest rates when any adjustments are not observed by the lenders. Surely regulation should dictate these adjustments are passed on, as it has been proven a free market cannot be relied upon to regulate itself fairly.

Chris, Manchester,

Bit late to save the economy.

Mark Steele, gateshead, uk

I don't think it's right to say that "borrowing costs" are lowest since May 1954.

Anyone moaning about savings rates clearly has fewer worries than most of the rest of us.

Barry, Belfast,

So people who borrowed too much are to be helped, whilst those who saved or whose savings supplement their pension will be hit. The £ is effectively devalued - sterling will drop - & eventually inflation will take off. All so Gordon can avoid an austerity Christmas and poor sales on the High Street.

Donna Walker, Effingham, England

"The drop in activity in the past quarter was broad-based, hitting every part of the economy except agriculture and the public sector, the GDP figures revealed."

Well fair enough, we all have to eat, even in tough times. But when will the public sector respond with cuts and start sharing our pain?

Tim, London, UK

This is going to be a disaster if you have any savings in sterling...rising inflation will eat away at its value. Time to get savings out of sterling, which is what a lot of people will do, which will have a knock on effect of reducing deposits with UK banks- further detrimeting their position.

Mark, Newbury,

All this is is another way of funding the banks. They pay savers a smaller interest return on deposits, don't pass one the cut to borrowers, and make more margin. The cost of financing cash goes down for banks, and the joke is the public think this is good news.

Brunty, Kent,

I wonder, what is the mandate of the Bank of England?
Is it just to say, they are independant, so that the incompetent Brown, can refuse to answer even more questions, in The Houses of Parliament. Now there's a building we could sell to the Arabs.

A Walton, Leicester, England

This is like slamming the anchors on after you've already hit the obstacle. I don't think this is going to do much really. The economy is really looking as though it's on the ropes.

David Campbell, Westerham, England

It is 2.00pm and we have already been told by the two banks we deposit funds with that the interest we receive on our deposit funds is being reduced by 1.5% immediately. No indication that our propety loans will be reducing, the earliest comment we have from the bank at the moment is yet!

Richard Hill, Bristol, UK

This is so depressing. What kind of society are we? Buying a home or spending money on things we don't need...is this what drives our economy? The fourth largest in the world....

Tom, London, UK