The group said it was cutting the cost of all but one of its mortgage products, reducing rates by between 0.1 per cent and 0.55 per cent.

The move continues the recent trend among lenders to pass on reductions in wholesale funding costs to consumers as they once again compete for borrowers.

Like other lenders, A&L's biggest reductions were on fixed-rate mortgages, with the group reducing its two-year fixed-rate mortgage to 6.69 per cent from 7.24 per cent, for people borrowing 85 per cent of their home's value and paying a £599 fee.

HSBC and Abbey both recently announced cuts to rates.

But A&L is also cutting the cost of its two-year tracker deal by 0.1 per cent to 6.39 per cent for people with a 15 per cent deposit, while the arrangement fee on the loan has been halved from 2 per cent of the sum borrowed to 1 per cent.

A&L spokeswoman Debbie Hughes said: "A number of lenders, including ourselves, are currently able to take advantage of lower money market rates. Lower swap rates have enabled us to reduce the rates on our fixed products."