Lenders in effect killed off cheap two-year trackers for new borrowers last week, with the average rate now at 7.26% - above Halifax’s benchmark standard variable rate of 7%. Sunday Times

Trackers are also 1.36 points higher than the banks’ cost of funding, which settled at 5.9% last week, suggesting lenders are using the opportunity to boost profit margins.

Abbey, Alliance & Leicester, HSBC, Halifax and Nationwide and Britannia building societies all increased rates on headline fixes and trackers for new borrowers, despite the quarter-point cut in Bank rate.