Is this the start of a decline in interest?

Millions of people with variable rate mortgages will enjoy lower monthly bills after this week's interest rate cut. But those who rely on their savings for income will wince at the prospect of seeing their returns hacked back.

And, as ever, there is little agreement among the experts as to whether we can expect more base rate cuts soon. That leaves first-time buyers and those looking to remortgage facing something of a dilemma. Do they grab one of the tempting fixed-rate mortgage deals currently on offer and therefore miss out on benefiting from any future rate reductions, or go for a discount or tracker loan and run the risk that this week's cut was a one-off?

On Thursday the Bank of England cut interest rates for the first time in two years, taking the base rate to 4.5% from the 4.75% it had been stuck at for a year.

Several mortgage lenders - among them the Halifax, HSBC, First Direct, Intelligent Finance and Sainsbury's Bank - announced almost immediately that they would be passing on the full 0.25% cut to their borrowers.

The Halifax said it would be reducing its standard variable rate from 6.75% to 6.5%. That will mean a saving of around £7.85 a month for a standard variable rate borrower with a £50,000 repayment mortgage, rising to £15.71 for someone with a £100,000 loan, and £39.26 for a borrower with a £250,000 mortgage.

However, the Halifax points out that less than 10% of its 2.5 million borrowers are on the standard rate. The rest are on fixed rates, trackers and other deals.

Other lenders have yet to reveal their hand - and we didn't hear much on Thursday about savings rates.

So what happens now? Some economists took comments made by the Bank about signs of a renewed pick-up in consumer spending as an indication that it was not ready to cut rates again soon.

But Roger Bootle, one of the City's best-known economists, is predicting base rates down to 3.5% - four more quarter-point cuts - by the middle of next year.

Most of those who have taken out a new mortgage recently won't benefit from this week's cut, because they opted for a fixed-rate deal. However, one lender, Portman building society, says: "This does not look like a particularly smart time to be locking into fixed rates."

Ray Boulger, at mortgage broker John Charcol, believes that the base rate is likely to continue falling, to below 4% next year, so the cost of fixed-rate mortgages has further to fall.

"For those who need the security of a fixed-rate, there are many good deals available now, but for those able to wait a little longer, there could be some mouth-watering deals come the year end and beyond."

Top deals available now include Alliance & Leicester's two-year fixed-rate priced at 4.28%, and Scarborough building society's five-year fix at 4.49%, both of which require a deposit of 5%-plus and carry a fee of £395.

Going up ...

Interest rates may be falling but for Halifax current account customers the fee for writing a cheque that bounces has just gone up.

The bank recently revealed it has upped its "failed item fee" from £35 to £39. That means it now charges more than many of its competitors.

This fee is imposed when there is not enough money in your account to make a payment. The change affects those holding the Halifax's standard current account and its Moneyback and Extras current accounts, as well as over-18s with its Cardcash account.

Halifax caps the charge ... at three £39 fees per day.

The fee increase comes despite the Office of Fair Trading recently announcing it will take action against banks which continue to levy excessive charges on credit card customers who pay bills late.