Interest rates cut to 5%
The Bank of England has cut interest rates by 0.25% to 5% in a bid to spark growth in the economy.
The move will benefit homeowners and borrowers and is designed to ease fears over the credit crunch.
But inflation rose to 2.5% in February and is expected to rise sharply in the months ahead due to higher energy and food prices as well as the depreciation of sterling on import costs.
One banking source said: "This move by the Bank of England is twofold - primarily it is aimed at easing the strain on the wholesale money markets and secondly at stimulating life into a mortgage market that has seen the number of available loans drying up and the cost of those loans rising.
"There have, however, also been some worrying signs that household spending growth has started to slow down in recent months.
"A quarter percent rate cut will hopefully go some way towards reversing this decline by reducing the cost of mortgages and other borrowing, thereby freeing up cash for other means."
Business sales Agent Graham Allman, of GA Select, said: "The reduction will add to the confidence of not only pub customers, who will have extra money in their pockets to spend, but also those looking to buy a pub.
"This is the third interest rate cut in 10 months and with the news from HSBC yesterday that it is matching domestic mortgage deals that have come to an end - it will hopefully put a spring in the step of commercial market place lenders.
"It is becoming apparent that things are not as tough as everyone says because we are coming off a very strong asset base and the demand for good businesses is still there."
