"Yesterday, we saw decisive action on interest rates from the Bank of England and the European Central Bank, and I welcome the fact that a number of British banks have now decided to pass on the interest rate cut to customers, to families and to businesses," he said.
The lenders had come under intense political and media pressure to pass on the Bank's decision to their customers as swiftly as possible, and in full.
Chancellor Alistair Darling held a breakfast meeting with bank bosses on Friday morning to press the government's case.
Whereas it's wholly rational for any individual bank to take a much more cautious and conservative approach to lending, it's wholly irrational for all of them to do so at precisely the same time
But the Council of Mortgage Lenders (CML) warned that the precise level of any reductions would be a commercial decision for each individual lender.
"The problem banks have got is that they have limited funds and don't have enough money to give to all the customers who may want them," Michael Coogan, director general of the CML told the BBC.
"I think over the next few days and weeks we will see that the banks and building societies will move by anywhere between 0.5% and 1.5% - the individual decisions will be on the basis of assessing what they want for their savers as much as what they want for their borrowers," he added.
Almost all tracker mortgages have been withdrawn for new borrowers as lenders consider at what rates to reintroduce them.
Lloyds TSB, which owns Cheltenham and Gloucester, has become the first to announce that it is to reduce the cost of fixed-rate deals for new borrowers.
Some deals for those offering a deposit of at least 25% will become 0.3 of a percentage point cheaper from Tuesday.
Lloyds TSB, HBOS and Royal Bank of Scotland, which owns NatWest, have taken government cash to strengthen their finances.
On the fifth floor of an imposing building in London's Canary Wharf, six people are putting together one of the world's most important numbers - the Libor rate
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