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| Bank expected to cut rates again | Bank expected to cut rates again |
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| The Bank of England is expected to cut interest rates later to their lowest for more than half a century. | The Bank of England is expected to cut interest rates later to their lowest for more than half a century. |
| Economists and business leaders have called for rates to be slashed to 2% - to prevent the downturn deepening. | Economists and business leaders have called for rates to be slashed to 2% - to prevent the downturn deepening. |
| Deutsche Bank economist George Buckley said the Bank needed to do "something aggressive" to help the economy. | Deutsche Bank economist George Buckley said the Bank needed to do "something aggressive" to help the economy. |
| Meanwhile, house prices fell 2.6% in November - their sharpest monthly drop since the housing market crash of the 1990s, according to the Halifax. | Meanwhile, house prices fell 2.6% in November - their sharpest monthly drop since the housing market crash of the 1990s, according to the Halifax. |
| Brakes on cars | Brakes on cars |
| According to its latest survey, that increased the annual rate of house price falls to 14.9%. | According to its latest survey, that increased the annual rate of house price falls to 14.9%. |
| The Halifax, which is the UK's biggest mortgage lender, said the average property in the UK was now valued at £163,605, nearly £31,500 lower than 12 months ago. | The Halifax, which is the UK's biggest mortgage lender, said the average property in the UK was now valued at £163,605, nearly £31,500 lower than 12 months ago. |
| Before the interest rates decision, the Halifax said its customers with existing tracker mortgages, that follow moves in the Bank of England's Base Rate, would benefit in full from any cuts. | Before the interest rates decision, the Halifax said its customers with existing tracker mortgages, that follow moves in the Bank of England's Base Rate, would benefit in full from any cuts. |
| This was despite a clause in the Halifax's paperwork which would have allowed it to put a limit on the cuts it passed on to mortgage customers. | This was despite a clause in the Halifax's paperwork which would have allowed it to put a limit on the cuts it passed on to mortgage customers. |
| Further evidence of the rapidly slowing economy has come from the latest car sales figures. | Further evidence of the rapidly slowing economy has come from the latest car sales figures. |
| New car sales in November fell 36.8% on the year before - the steepest decline in nearly three decades, according to the Society of Motor Manufacturers and Traders (SMMT). | New car sales in November fell 36.8% on the year before - the steepest decline in nearly three decades, according to the Society of Motor Manufacturers and Traders (SMMT). |
| The SMMT said the decline was most pronounced in the market for private cars, with registrations down 45.1% in November. | The SMMT said the decline was most pronounced in the market for private cars, with registrations down 45.1% in November. |
| Meanwhile, homewares retail chain The Pier - which has 31 stores and 17 concessions across the UK - became the latest victim of the economic turmoil and was placed in administration. | Meanwhile, homewares retail chain The Pier - which has 31 stores and 17 concessions across the UK - became the latest victim of the economic turmoil and was placed in administration. |
| 'Deep' recession | 'Deep' recession |
| Last month, the Bank of England surprised many commentators when it announced a dramatic cut in the Bank Rate from 4.5% to 3%. | Last month, the Bank of England surprised many commentators when it announced a dramatic cut in the Bank Rate from 4.5% to 3%. |
| Now most analysts are expecting a cut of up to one percentage point to 2%. | Now most analysts are expecting a cut of up to one percentage point to 2%. |
| However, some commentators have argued for even bigger cuts - calling for the Bank Rate to be slashed to below 2% - which would take it to its lowest level in the Bank of England's 314-year history. | However, some commentators have argued for even bigger cuts - calling for the Bank Rate to be slashed to below 2% - which would take it to its lowest level in the Bank of England's 314-year history. |
| FROM THE TODAY PROGRAMME More from Today programme | FROM THE TODAY PROGRAMME More from Today programme |
| Willem Buiter, a former member of the Bank's policy-making committee, now at the London School of Economics, has said that rates will need to fall to zero by next year, because the recession will be "deep" and "prolonged". | Willem Buiter, a former member of the Bank's policy-making committee, now at the London School of Economics, has said that rates will need to fall to zero by next year, because the recession will be "deep" and "prolonged". |
| Since the Bank was founded in 1694, the Bank Rate has never fallen below 2%. | Since the Bank was founded in 1694, the Bank Rate has never fallen below 2%. |
| "They need to do something aggressive again, because of where the data's been taking us," said George Buckley, chief UK economist at Deutsche Bank. | "They need to do something aggressive again, because of where the data's been taking us," said George Buckley, chief UK economist at Deutsche Bank. |
| The Bank has clearly signalled that with the economy slowing sharply, it is prepared to act decisively. | The Bank has clearly signalled that with the economy slowing sharply, it is prepared to act decisively. |
| "We will take whatever action we feel is necessary on interest rates to steer the economy back into calmer waters," Governor Mervyn King told a parliamentary committee last week. | "We will take whatever action we feel is necessary on interest rates to steer the economy back into calmer waters," Governor Mervyn King told a parliamentary committee last week. |
| "We may need to cut Bank Rate more than we would otherwise have done," he said. | "We may need to cut Bank Rate more than we would otherwise have done," he said. |
| Mortgage savings | Mortgage savings |
| On Wednesday, a key measure of confidence in Britain's services sector contracted in November at its fastest rate since at least 1996. | On Wednesday, a key measure of confidence in Britain's services sector contracted in November at its fastest rate since at least 1996. |
| The UK services purchasing managers' index (PMI) dropped by more than expected to a new record low of 40.1 in November, from 42.4 in October. Any figure below 50 indicates their outlook is worsening. | The UK services purchasing managers' index (PMI) dropped by more than expected to a new record low of 40.1 in November, from 42.4 in October. Any figure below 50 indicates their outlook is worsening. |
| The financial information service, Moneyfacts, estimates that homeowners with a standard £150,000 repayment mortgage could save between £19 and £75 a month - depending on the size of the rate cuts and whether lenders pass on the cuts in full. | The financial information service, Moneyfacts, estimates that homeowners with a standard £150,000 repayment mortgage could save between £19 and £75 a month - depending on the size of the rate cuts and whether lenders pass on the cuts in full. |
| Not all mortgage lenders are likely to pass on any cuts in full | Not all mortgage lenders are likely to pass on any cuts in full |
| According to mortgage advisers, John Charcol, only 10 out of 69 lenders have passed the last two rate cuts in full to their customers on standard variable rate mortgages. | According to mortgage advisers, John Charcol, only 10 out of 69 lenders have passed the last two rate cuts in full to their customers on standard variable rate mortgages. |
| However, Lloyds TSB, which also lends under the Cheltenham & Gloucester brand, has already pledged to pass on any reduction to its borrowers on standard variable mortgages in full. | However, Lloyds TSB, which also lends under the Cheltenham & Gloucester brand, has already pledged to pass on any reduction to its borrowers on standard variable mortgages in full. |
| For those mortgage customers on tracker deals - which track the Bank Rate - they may not get the full benefit of further cuts in rates. | For those mortgage customers on tracker deals - which track the Bank Rate - they may not get the full benefit of further cuts in rates. |
| Some lenders have a floor, also called a collar, on such deals for new and existing customers. This means that if the interest rates fall past this point, any cut will not be passed on to customers. | Some lenders have a floor, also called a collar, on such deals for new and existing customers. This means that if the interest rates fall past this point, any cut will not be passed on to customers. |
| Meanwhile on Wednesday, the government unveiled plans to allow people facing repossession to defer part of their mortgage interest payments for up to two years. | Meanwhile on Wednesday, the government unveiled plans to allow people facing repossession to defer part of their mortgage interest payments for up to two years. |
| However, any further cut in rates is unlikely to be welcomed by savers who often depend on interest payments from their savings - as banks are also likely to cut the interest they pay on these accounts. | However, any further cut in rates is unlikely to be welcomed by savers who often depend on interest payments from their savings - as banks are also likely to cut the interest they pay on these accounts. |
HOW MORTGAGE LENDERS RESPONDED TO RATE CUTS | HOW MORTGAGE LENDERS RESPONDED TO RATE CUTS |
| Lender SVR before BoE decision SVR after BoE decision Rate change (percentage points) HBOS 6.50% 5.00% -1.5 Nationwide BS 6.19% 4.69% -1.5 Abbey 6.94% 5.44% -1.5 Lloyds TSB/ C&G 6.50% 5.00% -1.5 Northern Rock 7.34% 5.84% -1.5 Barclays 6.64% Under review  RBS 6.69% 5.19% -1.5 HSBC 6.25% 5.44% (5 Dec) -0.81 Alliance & Leicester 6.94% 5.84% -1.1 Bradford & Bingley 7.09% 5.59% (7 Dec) -1.5 Bristol & West 6.59% 5.49% -1.1 Britannia BS 6.30% 5.30% -1 Yorkshire BS 6.60% 5.60% -1 GE Money 10.39% 8.44% -1.95 Coventry BS 6.84% 5.34% -1.5 Standard Life 6.59% Under review  Clydesdale & Yorkshire 6.64% 5.14% -1.5 Chelsea BS 6.94% 5.79% (31 Dec) -1.15 Skipton 6.45% 5.95% -0.5 SVR: Standard Variable Rate. All changes on 1 December unless stated.    | Lender SVR before BoE decision SVR after BoE decision Rate change (percentage points) HBOS 6.50% 5.00% -1.5 Nationwide BS 6.19% 4.69% -1.5 Abbey 6.94% 5.44% -1.5 Lloyds TSB/ C&G 6.50% 5.00% -1.5 Northern Rock 7.34% 5.84% -1.5 Barclays 6.64% Under review  RBS 6.69% 5.19% -1.5 HSBC 6.25% 5.44% (5 Dec) -0.81 Alliance & Leicester 6.94% 5.84% -1.1 Bradford & Bingley 7.09% 5.59% (7 Dec) -1.5 Bristol & West 6.59% 5.49% -1.1 Britannia BS 6.30% 5.30% -1 Yorkshire BS 6.60% 5.60% -1 GE Money 10.39% 8.44% -1.95 Coventry BS 6.84% 5.34% -1.5 Standard Life 6.59% Under review  Clydesdale & Yorkshire 6.64% 5.14% -1.5 Chelsea BS 6.94% 5.79% (31 Dec) -1.15 Skipton 6.45% 5.95% -0.5 SVR: Standard Variable Rate. All changes on 1 December unless stated.    |
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