The Bank of England has cut interest rates for the third time since December. Yet while an interest rate reduction is normally good news for borrowers and bad news for savers, analysts warn this may not be the case this time around. Clare Francis analyses what the latest rate cut means for you.

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funny you should ask that. Abbey actually increased the rate on its E-Saver Direct account by 0.25 percentage points earlier this week - it is now paying 6.5%. However, there are withdrawal restrictions on this account. Although it is advertised as an easy access account and allows you to get at your money at any time, you will be penalised for doing so. The interest rate falls to 2.75% in months you make a withdrawal.

Increasing savings rates just days before an interest rate cut is a highly unusual move, and while it is possible that other institutions may choose to increase some of their savings rates, it is unlikely. However, we are likely to see a number of banks and building societies deciding not to pass the rate cut on in full - in fact Kaupthing Edge has already announced that the rate on its Instant access account will remain unchanged. Like Abbey's E-Saver Direct, this account is paying 6.50%, although Kaupthing Edge does not impose any withdrawal restrictions.

While it is a great time to be a saver, you do need to keep an eye on your savings rate though as some providers will cut their rates by at least 0.25 points over the coming weeks on the back ot the latest interest rate reduction.