Bank of England cuts interest rates to lowest ever level of 0.5%

Now the rate stands at just 0.5 per cent.

The bank also launched an economic salvage bid with billions in newly-created money.

Official borrowing costs have fallen for the sixth month in a row, but the Bank will now tackle recession with so-called quantitative easing (QE) - effectively printing money - to ease credit conditions.

The Bank will create £75 billion to pump into the economy over the next three months.

As a result of the rate cut, mortgage costs came down for tracker customers but few borrowers on standard variable rates are expected to benefit from the latest interest rate cut.

Lloyds TSB, Nationwide, Halifax, and Skipton Building Society all said they would be passing on the reduction in full to people on their SVR, while Abbey is reducing its rate by 0.45%.

But four of the groups pledge that their SVR will never be more than a set percentage above the base rate, leaving them little choice but to reduce it, while Abbey failed to pass on any of February's cut to its SVR borrowers.

Other lenders sat on their hands, saying their rates were ''under review'' following the latest 0.5% cut, which reduced the base rate to a new record low of 0.5%.

Banks and building societies have warned that they need to balance the needs of their borrowers with those of their savers, whose deposits they need to fund mortgage lending.

More to follow.