Alan Clarke, chief UK economist at Scotia Capital, says:

Michael Saunders, UK economist at Citigroup, said the news was "bound to worry the MPC."

Howard Archer, chief UK economist for Global Insight, said that he expects house prices to fall by 5pc from current levels by mid 2012.

"Yet this proposed solution is a complete non-starter", in the opinion of one UK economist.

Justin Silvertown, UK economist at Daiwa said: 'The 1% rate cut is highly welcome and broadly in line with expectations.

Samuel Tombs, UK economist at Capital Economics, said the threat of a renewed credit crunch was likely to weigh down on lending in the coming months.

The author is chief UK economist with the investment bank Midland Montagu.

"Today's figures confirm that disinflationary pressure in the economy is building," Samuel Tombs, a UK economist at Capital Economics, said.

Samuel Tombs, UK economist at Capital Economics, says:

Alan Clarke, UK economist at Scotia Capital, said: "Whether the economy has already entered recession or not is pretty academic.