Capital G Bank yesterday announced a cut of 0.5 percent in their lending rate for Bermuda dollar loans in response to the US Federal Reserve rate cut on Tuesday.

Capital G's published lending rates effective yesterday were 7.25 percent for 30 years and seven percent for 15 years. Meanwhile, Bermuda Dollar Savings rates will remain unchanged at this time.

This follows the Bank of Bermuda's decision to reduce interest rates for all mortgages, personal loans and commercial loans by 0.5 percent on Tuesday.

Yesterday, the pound fell against the euro and the dollar after expectations were raised of an imminent cut in interest rates, with the minutes from the latest meeting of the Bank of England's interest rate setting committee showing two members voting for an immediate cut.

On Tuesday the Fed cut US interest rates to 2.25 percent from three percent in a bid to restore confidence to nervous financial markets and boost the ailing economy.

A Capital G spokesman said: "The new reduced lending rates make it an ideal time for customers to purchase a home, make some necessary renovations or explore new or expanding business opportunities. The new reduced lending rates make it an ideal time for customers to purchase a home, make some necessary renovations or explore new or expanding business opportunities."