Banks and building societies pressured to pass interest rate cut on to mortgage borrowers.
The Bank of England’s Monetary Policy Committee has cut the Bank’s base interest rate by 1.50% from 4.50% to 3.00%. The rate cut is the biggest in the UK since a 2% cut in March 1981 – when the country was gripped by recession. It brings rates to their lowest level since 1955.
The size of the cut reflects what the Bank of England described as ‘a very marked deterioration in the outlook for economic activity at home and abroad’.
The Bank of England will be hoping that this dramatic move will boost consumer and business confidence. Mortgage borrowers will be hoping that this interest rate cut will provide them with some much needed financial relief.
Mortgage costs must fall
Which? personal finance campaigns manager, Doug Taylor, says: “If the banks fail to pass on a base rate cut, it will be another slap in the face for mortgage customers, many of whom are struggling to make ends meet. To add insult to injury, the banks will no doubt be falling over themselves in the rush to cut savings rates.
“All of the banks, particularly those who have benefited from taxpayers’ money, should be passing on any base rate cuts in full to their customers.”
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