The boss of Lloyds, Britain's biggest mortgage lender, has warned borrowers not to expect cheaper deals if the Bank of England cuts interest rates.

Chief executive Charlie Nunn said two-and five-year fixed rate deals currently available had already 'locked in' the cuts that are coming.

'Our expectation is, unless there's a material shift in expectations around future interest rates, that mortgage pricing is going to stay pretty stable,' Nunn said.

Markets are betting that the chance of a cut at next Thursday's Bank of England meeting is 50/50.

Lloyds Banking Group, which also includes Halifax and Bank of Scotland, expects two rate cuts this year. Monthly mortgage repayments rose sharply as rates were hiked to tame high inflation.

But most borrowers are on deals set at a fixed rate for the first few years of the loan, so are not affected by changes in the Bank rate and move up and down depending on market expectations.

That means borrowers taking fixed deals today are already enjoying rates that are lower than the 5.25pc Bank benchmark - and are unlikely to see much benefit when the Bank does cut.

Nunn said: 'There are mortgage offers today at around 4pc... so customers are already getting significant value.'

Lloyds reported a 14pc fall in pre-tax profits to £3.3bn for the first half.