FEARS that lenders would not pass on yesterday’s interest rate cut to customers eased last night when Halifax, Nationwide and First Direct all said they would apply the cut in full.

Halifax said it was reducing its standard variable mortgage rate (SVR) to 7.5%, while Nationwide is cutting its SVR to 6.99%.

The move will knock around £16 a month off the cost of a typical £100,000 mortgage, reducing monthly repayments from £755.32 to £738.99, based on a new rate of 7.5%.

By the time the Bank of England announced its decision most analysts were expecting a cut. But late last week there were some who thought the Monetary Policy Committee (MPC) might resist the move over fears of stoking up inflation.

However, as the two-day MPC meeting got underway on Wednesday, opinion had shifted and the financial markets were expecting a cut. In fact, some analysts believe the Bank may have caved into pressure to make the cut rather than risk further market turmoil.

“With 80% of the cut priced into the market the Bank would have been aware of the risks of not delivering, especially in light of current market tensions,” said George Buckley at Deutsche Bank.

“Their responsiveness means they are likely to cut rates a little further than we thought.”

Economists usually say that it takes around 18 months for a rates change to start to affect the economy. That may be the case in strictly mechanical terms but the effect on the behaviour of individuals and markets can occur much more quickly.

Both homeowners and analysts will hope this latest move can help alleviate the deepening gloom.