Bank of Ireland has joined in the latest round of interest rate cuts. The bank is cutting the rate of interest charged on loans by between 0.5 of a percentage point and 1.25 per cent, while deposit rates are to drop by between 0.175 of a percentage point and 1.25 per cent. The new rates come into effect from close of business tomorrow.

After the reduction, Bank of Ireland's standard variable mortgage rate will fall by 0.75 of a percentage point to 5.9 per cent. Personal overdraft rates will fall by 0.5 of a percentage point to 10.5 per cent. For loans of less than one year, the interest rate will also be reduced by 0.5 of a percentage point to 10.5 per cent.

The rate of interest on business overdrafts will be reduced by 0.875 of a percentage point to 8.7 per cent.

Deposit rates are also in decline, with the rate of interest on a demand deposit falling to 0.2 of a percentage point on sums less than £5,000. This rises to 0.5 of a percentage point on amounts of over £100,000.