7th November 2008 London-The Bank of England cut interest rates by a whopping 1.5% this week, dropping the bank’s rate to just 3%. That is the lowest it’s been since 1954 and government ministers urged banks to pass on the rate cuts to consumers.
So far, Lloyds TSB has signaled that it will pass on the rate cuts to those with variable rate mortgages. HSBC, Nationwide, Barclays and RBS are reviewing the situation with their rates. If the full rate cut were passed on to borrowers, it would be worth around £130 a month to a homeowner who has a £150,000 variable rate or tracker mortgage. Approximately 40 percent of mortgage holders have tracker loans and 10 percent have standard variable loans.
Chancellor Alistair Darling was glad to see the rate cut by the bank, but wants it to be passed on to consumers: “I believe that it is imperative that banks realize they have got to play their part in helping businesses and helping people, and one of the key ways they can do that is by passing those interest rate cuts through.”
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