The Bank of England has cut interest rates by 0.25% to 5%, their lowest level since November 2006.

Peter Sobey, Lloyds TSB head of agriculture, said the second consecutive 0.25% cut of 2008 was welcome for farmers, particularly with volatility in the commodity markets.

“The cut will be particularly welcome in the red- and white-meat sectors, where margins are under serious pressure,” he added.

Despite the Bank of England’s decision, farmers were warned banks may not automatically reduce their interest-rate levels.

Trevor Williams, Lloyds TSB chief economist, said: “There are some who believe that rates could fall further still, but the likelihood is that today’s cut will be the last we will see this year unless the economic situation deteriorates further.”