Financial experts have been calling for a rate cut of one percent, which some thought to be unrealistic, so a cut of 1.5 per cent has been welcomed with open arms.

The rate of three per cent is the lowest it has been since 1955 and follows the Bank’s half a percentage cut last month to 4.5 per cent, which at the time came as a shock.

Commenting on the Monetary Policy Committee’s decision, director of mortgages at Legal & General, Ben Thompson, said: “If you consider that just six months ago Mervyn King was saying that there would be no rate cuts until 2010, the mindset now is completely different.

“The cut today is welcome, but sadly many borrowers aren’t going to benefit. There’s no obligation for lenders to reduce their standard variable rates and if last month was anything to go by, most will be reluctant to cut their SVRs significantly because these rates look relatively good value at the moment.”

Speaking on behalf of the Building Societies Association (BSA), director general Adrian Coles said: “This reduction in the Bank rate will provide some support for the housing market and especially borrowers on tracker rates. However, borrowers looking for new fixed rate deals or homeowners with mortgages linked to money market rates will not necessarily find their mortgage rate decreasing.

“Building societies will do all they can to ensure that the cost of mortgage borrowing is as low as possible. However, the Bank Rate is just one of the issues that they have to consider.”

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