An interest-rate cut on Thursday could see more banks and building societies lower their mortgage rates during November than did last month after similar reductions, experts claim.

But these lenders will mostly be the ones who chose not to pass on the October cuts.

The Bank of England is expected to slash the base rate by at least 0.5% this week, with some economists predicting a 1% reduction.

But only 54 out of the 96 lenders that have a standard variable rate (SVR) mortgage have so far passed on October's 0.5% reduction, with many of these failing to pass on the full cut.

The problem for lenders is that their own funding costs are based on the inter-bank lending rate Libor, rather than the base rate, and wholesale funding costs have been slow to respond to the October cut.

The key lending rate of three-month Libor stood at 6.27% or 1.27% above the Bank's base rate on October 8 when interest rates were last reduced.

But it took until November 3 for the rate to fall by nearly the full 0.5% to stand at 5.78% or 1.28% above the base rate.

Ray Boulger, senior technical manager at mortgage experts John Charcol, said: "I think a higher proportion of lenders will pass something on this time.

"The reason some lenders did not pass anything on was that three-month Libor remained stubbornly high.

"It has now nearly come down by the full half point, so some of the lenders will be able to pass on some of the October cut this time as their own costs have now fallen."

But he added that he expected fewer lenders to reduce their SVRs by the full cut made by the Bank's Monetary Policy Committee, particularly if the base rate falls by 1%.

Lloyds TSB, Halifax, Barclays' lending arm the Woolwich and Royal Bank of Scotland were the only lenders to announce they were reducing their SVR by the full 0.5% on the day the cut was announced in October.

Mr Boulger said that given three of these lenders had recently received Government support, there was likely to be a similar pattern if a cut is announced this week.

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