Bank of Ireland will reduce its variable mortgage rate by half a percentage point - to 4.64 per cent from 5.14 per cent - next Thursday. The reduced charge equates to an average percentage rate (APR) of 4.8.

The bank's reduction reflects the half-point rate cut by the European Central Bank (ECB) on Thursday, which followed similar cuts in the US and Britain as central banks sought to kick start economies struggling in the wake of the attacks in the US on September 11th.

AIB, First Active and Ulster Bank were the first to signal lower mortgage rates after the ECB reduction, its fourth this year.

The cut to 3.25 per cent brings rates to the lowest level since February 2000.