As expected the Bank of England have cut interest rates from 0.5 per cent to 0.25 per cent.

This is the first change in seven years and sees the lending rate at an all-time low.

The bank has also reduced its growth prediction for 2017 from the 2.3 per cent, which it was predicting in May, to just 0.8 per cent.

Inflation is also predicted to rise above its 2 per cent target as a result of the falling value of the pound, said the bank.

In a bid to ward of recession the bank also unveiled an emergency package worth up to £170 billion to ward off recession following the Brexit vote.

The bank said it would expand its £375 billion quantitative easing (QE) programme by £60 billion to £435 billion - the first QE increase since 2012.

The quarter-point rate cut is good news for home-owners, but spells further misery for long-suffering savers.

It will shave around £26 a month off mortgage payments for those who borrowed £200,000 over 25 years, according to the Council of Mortgage Lenders.

But for savers it will mean even lower returns on their nest-eggs after more than 1,000 rate reductions already during 2016 alone.

A new £100 billion Term Funding Scheme, will lend directly to banks at rates close to the new 0.25 per cent base rate, to encourage them to keep lending and make sure that lower interest rates are passed on to businesses and households.

More rate reductions are also on the cards, with the minutes of this morning's Monetary Policy Committee meeting revealing that most members expect to cut rates to a ''little above zero'' by the end of the year if growth slows as expected.

Commenting on the interest rate cut Barratt Homes managing director Tim Hill said: “This is a positive move from the Bank of England and means more good news for homeowners, particularly those on tracker mortgages. The mortgage market is currently very competitive and we expect to see lenders launching even more exciting new products soon. With interest rates at a record low now is a particularly good time to speak to a mortgage adviser to see what deals you can get.”