According to figures, eighteen of the 103 mortgage lenders failed to pass on any of last month’s interest rate cut, while sixteen reduced their rates by less than the full 0.25%. However, many banks and building societies have taken the opportunity of the interest rate cut to reduce their savings by more than the 0.25% reduction in base rates. A total of 117 providers have so far cut their savings rates, with just 15 leaving them unchanged. Alliance & Leicester has made the biggest reductions to its savings by slashing rates by up to 0.5%, while HSBC has reduced some accounts by up to 0.49%. Britain’s biggest mortgage lender Halifax and Bradford & Bingley have both cut rates paid to savers by up to 0.4%, while a number of banks and building societies, including Britannia, Royal Bank of Scotland and NatWest, Yorkshire Bank and Sainsbury’s have decreased them by 0.3%. Will another rate cut mean banks carry on cheating customers even more?
Archive for the ‘Bank of England’ Category
Many lenders failed to pass on rate cut
Wednesday, January 9th, 2008Rate cut or rate hunch?
Tuesday, January 8th, 2008The Bank of England will come under intense pressure to cut interest rates this week as figures out show that the high street suffered its worst Christmas for three years. Retailers endured another difficult day on the Stock Exchange amid mounting fears of possibly one of the toughest trading spells in recent memory. The gloom surrounding the economy may deepen if, as expected, Halifax reports that house prices fell again in December for the 4th consecutive month - making a case for a speedy rate cut. However, many economists believe that fears over inflation, fuelled by record petrol prices and rising gas bills, may force the Bank of England to wait until February or March before taking the next move down. The decision on interest rates will most definitely be a close call.
Central banks try to regain control
Friday, December 14th, 2007Five of the world’s leading central banks including the Bank of England plan to inject £54bn of cash loans into the money markets. They hope this would ease the interbank rates (the rate used by banks to lend each other money) which has remained stubbornly high despite the quarter rate cut last week. Although some analysts believe this will result in an immediate reduction in the interbank rates (and filtering through to mortgages/loans) others however, warn that it would take time for lender to trust each other again. Probably not while there are still huge bank losses still to be realised from the subprime crisis for some months to come. So will this gesture make a difference or has it come too late? We’ll have to wait and see.
