Savings alert as banks cut interest rates

Market analyst Moneyfacts named Coutts & Co, Abbey and the Derbyshire Building Society as the worst offenders. They have lowered certain savings rates by 0.4, 0.5 and 0.6 per cent respectively. In addition, Teachers Building Society has cut its savings rates by up to 0.35 per cent.

Rachel Thrussell, head of savings at Moneyfacts, said: "Customers need to look at the rate they will now be offered and, if they feel they are not receiving a competitive rate, they will find plenty of others who will welcome their custom."

In addition to the savings-rate reductions, 28 mortgage lenders have, so far, cut their standard variable interest rates. In most cases, borrowers will benefit from the full MPC reduction. But about 100 lenders have yet to state what action they will take.