Interest rates cut by 1 per cent as expected.

Chris Cummings, Director General of AMI, said: "Today's further interest rate cut is a welcome one and a sign that the Bank recognises the seriousness of the situation we face. This cut is essential to try to boost the ailing economy. However, on its own, this move will not have the positive effect we need to get the mortgage market lending again. Revitalised mortgage lending is vital if we want to increase consumer access to finance.

"Although such a significant cut is welcome the negative impact of a lower Interest Rate on savings will make it harder for some Banks to lend. It is therefore essential that the Government intervenes swiftly to implement Sir James Crosby's recommendations for the mortgage finance markets. Sir James set out some radical proposals for the market, which included Government guarantees of new mortgage securities. This move would help to ease the future funding of mortgage loans. However, we want to see this measured implemented now and not delayed further."