THE Bank of England's quarter per cent cut in interest rates has been given a cautious welcome by Worcestershire retailers and estate agents.

But although the Bank's Monetary Policy Committee trimmed the cost of borrowing to 5.25 per cent, business leaders didn't think it had gone far enough.

"A drop in interest rates was fairly well predicted," said Gary Woodman, policy and lobbying executive for the Chamber of Commerce Herefordshire and Worcestershire.

"However, I think we would have liked them to have been a bit bolder and gone for a 0.5 per cent cut. But it is a move in the right direction and we don't want to create the impression of panic. We must not talk ourselves into recession."

Richard Shelton, sales director of Premier Places, added: "I think 0.5 per cent would have been more like it but there are predictions, a report out today, that there will be three interest rate drops this year.

"If that happens it will certainly help the property market."

Mr Shelton said it is currently a buyers market and Premier Places had seen a nine per cent increase in first-time buyers for January in comparison to October, November and December put together.

Charles Robinson of Worcester estate agents Griffiths and Charles, who is West Midlands spokesman for the Royal Institution of Chartered Surveyors said: "While it is welcome, I cannot see it making very much difference to the property market at present.

"We really need something more along the lines of America, where there was a more positive move. It is also going to take a while to work its way through and anyway it remains to be seen whether the banks and building societies follow suit.

"Just because the Bank of England drops the rate a quarter of a per cent doesn't necessarily mean they will too."