I'm gobsmacked by the Bank of England's short memory. Have they not read that cutting interest rates to almost zero did nothing to help the Japanese economy recover in the 1990's?

I think this is nothing more than a knee-jerk measure to reassure homeowners. Sadly I think the banks are likely to be slow to pass on the savings to existing borrowers but they will quickly be advertising the great rates available to new borrowers.

The worst thing, in my opinion, is that it's going to do absolutely nothing to the millions of people with unsecured debt from credit cards, personal loans, and car finance deals.

As for the markets: I still don't think it's going to bring the markets out of the doldrums. The FTSE is down over 30% so far this year and it's going to take a serious upturn in confidence to get people back into buying shares.

Not only that but I think it's grossly optimistic to assume that just because interest rates have been cut it will stimulate people into spending, which in turn will bolster the capital markets.

Far too many people have adopted a cautious approach to spending and I think that many people will be getting cheaper presents for Christmas this year.

However, if you have savings available you should put that money AS SOON AS POSSIBLE into a fixed rate high interest account. Get in there before the banks start cutting the rates they pay out.