Business leaders have broadly welcomed a 1.5 per cent cut in interest rates, but some say it may still not be enough to stimulate the ailing economy.

The Bank of England’s Monetary Policy Committee surprised experts with the size of the cut, underlining the depth of the economic crisis hitting the UK.

Most commentators expected a half per cent cut in base rate, although some had called for a one per cent drop.

The latest dramatic fall takes the base rate down to just three per cent. But some believe it will fall further, perhaps even as low as zero per cent next spring.

Jo James, chief executive of Kent Invicta Chamber of Commece, said the cut was greater than the chamber had expected but would be welcomed by businesses and consumers. "It should help build confidence," she said.

But she had this warning for the bank. "The MPC have to make sure that they don’t introduce too many emergency measures in the short term and not leave any reserves should the recession deepen."

Tracey Manley, chief executive of Thames Gateway Kent Chamber, based in Medway, said the cut was large and she had not expected such a big cut. It should encourage people to spend more in the high street.

But she was not confident that the banks would pass on the full interest rate cut. "They’re still trying to sort their own houses out," she said.

"The biggest problem for companies at the moment is not getting paid on time and this may help speed things up."

She did not expect the rates to fall again. It was about as far as the bank could go, she said. It would be "silly" to go lower.

Mike Lazenby, chief executive of Chatham-based Kent Reliance Building Society, said the rate cut would not do anything to help borrowers other than those on tracker rates. They would save about £100 a month on a typical £80,000 mortgage.

Around 25 per cent of Kent Reliance borrowers were on this type of mortgage, with 60 per cent on fixed rates and only 15 per cent on standard variable rate.

Those on SVR would not necessarily see any benefit because the cost of money in the inter-bank market (LIBOR) hasn’t gone down. "It will have no impact whatsover on the markets unless if affects LIBOR," he said.

"We will not know until the market shows its reaction. Were waiting to see. The key rate is the LIBOR rate, the base rate is irrelevant. It won’t be cheaper mortgages for everybody, it just won’t."

While borrowers hope to benefit from the cut, savers will worry that it will slash their income. Mr Lazenby said Kent Reliance had not dropped savings rates when the Bank cut the rate by half a per cent last month.

The society would try to protect people on limited or fixed incomes. "We will do everything we can to protect the 65-plus account and to a lesser extent the ISA account."

Richard Cotton, of Cluttons, the property specialists with an office in Maidstone, said the cut would deliver an immediate boost to the economy but called on lenders to pass on the reduction without delay.

"With the bank rescue plan now in place there is no longer an excuse for high mortgage rates," he said. "Rate cuts will help improve sentiment in the housing market, which is at an all time low, but we now have the added issue of redundancies and a rise in unemployment which is a further drag on the immediate outlook."

The Federation of Small Businesses, which has 6,000 members in Kent and Medway, said the cut would make an enormous difference to small firms and put money in people’s pockets before Christmas. "The cut amounts to a generous saving for small firms of £750m on loans and overdrafts," it said.

"But all this will come to nothing if the banks do not follow through and pass on the rate cuts to those small firms struggling with increased costs of credit."

Stuart Law, chief executive of Assets, a property investment group claimed the Bank’s "dithering" had led to the large rate adjustment. "Do not be surprised if base rates end up at 0% in spring 2009, " he said.