INDUSTRY and commerce in the south welcomed the Bank of England's move to counter economic slowdown by cutting interest rates a quarter per cent. The move should also delight homeowners and give a boost to struggling manufacturers.

The surprise cut is the fourth this year and brought interest rates down to five per cent, the lowest since August 1999.

Alexandre Hamelin, policy and research manager at the Southampton & Fareham Chamber of Commerce, said: "This is fantastic news and will help cushion the UK impact of the global slowdown. The Bank of England has sent a clear signal that it is not prepared to allow the global slowdown to strike any deeper into our domestic economy.

"With global recession not yet off the agenda, this pre-emptive quarter point cut will help boost business confidence and provide some relief to our hard-pressed manufacturers.

"To ensure growth remains on track, the Bank should remain vigilant to the risks threatening the UK economy and be ready to cut rates further if conditions worsen."

The British chambers' most recent analysis of UK business performance showed firms suffered their worst period of economic activity for over two years last quarter, with recession closing in on manufacturing and the service sector losing its grip on growth.

The Southampton & Fareham Chamber of Commerce represents 2,000 businesses in all economic sectors and of all sizes in the Southampton region.

Union leaders said it would alleviate pressure and save jobs, and for homeowners the average mortgage will be just under £10 a month cheaper as mortgage rates hit their lowest levels for more than 40 years.