Many mortgage lenders are refusing to pass on last month's cut in interest rates, new figures show.

The Bank of England reduced the cost of borrowing by 0.25% to 5.5% in December, but 18 of the country's 103 lenders have so far failed to pass on the cut, while 16 others have reduced rates by less than the full amount.

The UK's sixth largest building society Skipton and the 10th largest, Cardiff-based Principality, are among the firms to keep rates as they were.

And internet bank Egg and troubled lender Northern Rock have only reduced their mortgage rates by 0.15%.

But many banks and building societies moved quickly to reduce the rate paid on their savings accounts, as 117 providers have so far cut their deals, with just 15 leaving them unchanged.

Britain's biggest mortgage lender Halifax and Bradford & Bingley have both cut returns for savers by up to 0.4%, while a number of financial institutions such as Britannia, Royal Bank of Scotland and NatWest, Yorkshire Bank and Sainsbury's have reduced them by 0.3%.

The figures come as the Bank of England's Monetary Policy Committee prepares to hold its two-day interest rate meeting.

Economists predict the MPC will reduce interest rates to 5.25% in the near future, but are divided on whether the cut will come this month or in February.

Howard Archer, chief economist at Global Insight, said it is "touch-and-go" as to whether the MPC will cut rates by another quarter of a point to 5.25% this week.

There are already concerns about inflationary pressures, especially as oil hit $100 a barrel for the first time recently and prices at the petrol pumps have risen to record highs.

Mr Archer said: "If consumer spending appears to have held up relatively well in December, it would increase scope for the MPC to remain on the sidelines for another month.

"But regardless, we expect the Bank of England to cut interest rates by a further 25 basis points to 5.25% by February at the latest and we expect them to be down to 4.75% by the third quarter."

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