Base rate cut makes things worse, says the nation

For every person benefitting from the Bank of England's decision to cut interest rates, three people will be worse off.

Seventy per cent of the 7,500 moneysupermarket.com users polled since the cut said they would suffer - compared to only 23 per cent who said they would benefit.

Louise Cuming, head of mortgages at moneysupermarket.com, said: "Lower rates are not what the housing market needs at the moment. It is crying out for more readily available credit and, with these historically low rates, lenders will be even more wary of lending at volume.

"The cut from 1.5 to one per cent is only good news for a minority of borrowers. The ability of people to save enough for the hefty deposits that so many mortgage lenders now demand will be even more difficult due to the pathetic savings rates that are out there.

"The poll shows the tragic situation of the Bank of England giving with one finger but taking with the other three.

"The Bank of England is creating the dangerous situation of a new breed of trackers with much wider differentials. We have already seen these margins more than triple since October - from 0.76 to 2.36 per cent. This cut could well herald tracker margins of three per cent, which would be calamitous for borrowers when rates start to rise again."

Worst of all for savers is that there are now 46 banks and building societies with at least one savings account offering a rate of 0.1 per cent or less.

Louise Cuming added: "In times of trouble, we must have deposits with banks increasing but we've now reached the stage where there is no incentive to save - only a need to.

"Pensioners in particular are being crippled by falling rates - and even the call for all savings to be tax free will make little difference because they are now earning such a paltry amount of interest."