HOMEOWNERS are today waiting to see if and when a huge cut in the interest rate will be passed on to borrowers.

The Bank of England yesterday slashed the base rate by 1.5%, taking it to 3%, its lowest since the 1950s. The move followed calls from industry for lower rates as the UK faces recession.

Alan Bougourd, managing director of mortgage provider Skipton Guernsey Ltd, said that the board decided the rate it charged.

‘The board hasn’t met. We can’t pre-empt it.’

A key factor will be the impact the rate cut has on the London Inter-bank Offered Rate, the rate at which international banks lend to each other.

Pierre Blampied, director of Savills Private Finance, said, ‘Banks are more keen to get cash deposits and are not hungry to go out and lend.

‘But they also have a problem as Libor has been so high above the base rate. The banks aren’t as competitive as they were to lend.’