In a bid to stimulate the economy the MPC has enacted the biggest cut in rates since it gained independence in 1997, and the biggest since a two point cut in 1981.
The rate is now at its lowest level since 1955.
Commenting on the announcement today by the Bank of England to cut the Bank Rate by 1.5 percentage points to 3%, Adrian Coles, Director-General of the BSA said: "The BSA welcomes the MPC's decision to cut the Bank Rate by 1.5 percentage points to 3%. The outlook for the economy has deteriorated considerably in recent months, activity in the housing market has stalled, and house prices have fallen.
"This reduction in the Bank Rate will provide some support to 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 rates decreasing.
"Building societies have a number of factors that they need to consider in determining mortgage rates, of which the Bank Rate is but one. Others include:-
* flows of funds through societies,
* money market rates,
* competition in the savings and mortgage markets
* the desire to look after savers' interests
* the need to maintain margins
* the requirement for societies to fund part of the costs of the Bradford & Bingley and Icelandic banks bailouts
"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."
