The Bank of England’s monetary policy committee (MPC) has opted to cut the base rate of interest to five per cent, it has been revealed.

Millions of homeowners are struggling with serious debt problems and the base rate reduction could help ease the financial burden for some.

However, concerns have been raised that the cuts introduced by the bank’s MPC are not having a perceptible impact on British consumers and their money problems.

Vince Cable, Liberal Democrat’s economic spokesperson, said "There is currently a fundamental disconnect between the Bank of England’s interest rate and the rates high street banks are willing to offer customers."

Meanwhile, a number of groups, including the Intermediary Mortgage Lenders Association, have suggested that they would have liked to see borrowing costs fall by half a percentage this month.

After a series of increases in 2006 and 2007, the base rate of interest was cut in December of last year and in February 2008.