Council of Mortgage Lenders:

"This will help the wider economy, even if it cannot be reflected universally in lower mortgage rates. Where lenders feel they can reduce mortgage rates, they will. But their own cost of funds varies.

"For the specialist non-deposit taker lenders funding remains both expensive and scarce. And deposit takers — banks and building societies — also need to weigh up the position of their savings customers, and the rates they need to keep and attract retail deposits in order to achieve the funds necessary to be able to lend at all."

British Retail Consortium:

"This is exactly the type of decisive action we need during these uncertain times. With the threat of inflation fading, the Bank of England is right to concentrate on jump-starting the economy.

“Decisions now will greatly influence how long and deep the recession is. Retailers are passing on VAT cuts and going further with big discounts of their own to help hard-pressed customers. The Bank’s job is not done. It must continue to cut rates in the new year to get the economy heading in the right direction again.”

Federation of Small Businesses:

“This historic rate cut sends out the right message to the banks to lend fairly to small businesses. One in three of our members are still reporting trouble accessing finance so this move is very welcome.

"The burden is now on the banks to pass this cut on to their customers. This cut will provide a welcome piece of mistletoe to give a kiss of life to the economy when it needs it most.”

Howard Archer, chief UK and European economist at IHS Global Insight:

"We expect the Bank of England to reduce interest rates by a further 75 basis points to 1.25 per cent in January, and would not rule out a larger cut if the economic downturn continues to deepen.

"We now expect interest rates to fall to a low of 0.50 per cent in the second quarter of 2009 and then stay there for the rest of the year. However, it is not inconceivable that interest rates could come all the way down to zero."

Chartered Institute of Personnel and Development:

“The jobs market was calling out for this big rate cut — what’s vital now is that commercial rates fall in line to aid hard-pressed employers. With bank rates at an historic low, we are clearly entering uncharted economic waters.

"The Monetary Policy Committee has wisely left room for further cuts but there aren’t now many throws of the monetary dice left.”

Explore Economics

• Pre-Budget Report 2008

• Budget 2009

• World Economic Forum

• The Times MPC

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