Mortgage lenders pressured to pass on rate cut Chancellor forces banks to make 1.5 percent cut

07 November 2008

The UK's largest mortgage lenders have agreed to pass on the Bank of England's base rate cut in full following pressure from the government

A flurry of banks and building societies said they were to drop mortgage interest rates by 1.5% after the Bank of England slashed the base rate on Thursday.

Mortgage lenders begin to pass on rate cut

Royal Bank of Scotland, Barclays, HBOS, HSBC, Nationwide and Standard Chartered all followed the lead of Abbey & Lloyds TSB who were the first to announce cuts.

The move by lenders came after banking chiefs were hauled in front of the Chancellor Alistair Darling and told they must pass on the cut ‘as soon as possible’.

Shock rate cut by Bank of England

Which? Money editor Martyn Hocking said: ‘After Thursday's interest rate cut, it would have been utterly wrong for the banks who were bailed-out by tax payers not to help those struggling with mortgage payments. However, there is already talk of people with tracker mortgages not benefiting from any further rate cuts. Which? will continue to press for the full benefit of rate cuts to be passed on to consumers’..

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