Commenting on the announcement, Louise Cuming, head of mortgages at moneysupermarket.com, said: "This demonstrates the chasm between Government rhetoric calling for lenders to pass on all rate cuts and financial reality. In the current climate we need financial stability and that starts with profitability.

"Nationwide has said it wants to be able to offer decent savings rates but with some of its deposit accounts offering less than 1%, we need to be sure that Nationwide's actions start to match its words.”

Other big lenders are likely to follow Nationwide's lead and many tracker borrowers already have a clause in their mortgage contract saying that should rates fall below a certain level, the rate cut won’t be passed on.

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