The changes, which will come into effect next Monday (1 September), will see Vanguard charge just 0.08% for its UK equity index trackers.

Earlier this month Investment Week revealed providers were on the verge of responding to Fidelity’s recent price cuts, and today’s move puts Vanguard broadly in line with those charges: Fidelity’s UK index tracker costs 0.07% on its own platform and 0.09% from other providers.

Vanguard’s global ex-UK tracker (at 0.15%) is now cheaper than Fidelity’s World tracker (0.18% via Fidelity or 0.2% on other platforms), but Fidelity remains cheaper for Japan (0.1% or 0.12% compared with 0.23% at Vanguard) and EM (0.23% or 0.25% compared with 0.27% at Vanguard) trackers.

Other providers, such as BlackRock and L&G, fall in between the two on EM, Asian and Japan trackers.

Ongoing charges across Vanguard’s index funds will now range from 0.08% to 0.38%. ETF ongoing charges will range from 0.07% to 0.29%, while ongoing charges for the LifeStrategy fund range will be lowered to 0.24%.

Vanguard Europe managing director Tom Rampulla said: “As we broaden our presence in Europe, we will leverage operating efficiencies and use our increasing global scale to keep costs to a minimum for investors.

“These fee reductions are business as usual for Vanguard.”

Fidelity responded by saying it remained the lowest cost provider of trackers for regional equity markets.

Ben Waterhouse, head of UK retail sales at Fidelity Worldwide Investment, said: “We launched our low cost index range in March and further cut our charges in May to offer investors an alternative to some of the poor value trackers available today. This was a popular move as since launch, our range of seven trackers has grown by over £400m.

“Today, we remain the lowest cost provider of index trackers for regional equity markets. Investors and intermediaries can access Fidelity Index funds from as low as 0.07% OCF making them the best value equity tracker funds available in the market.”