Articles | Banks urged to pass on rate cut

Banks urged to pass on rate cut

Published: Friday, 9 January 2009, 9:11AM

Pressure is growing for all lenders to pass on the 0.5 per cent cut in interest rates.

The Bank of England has reduced rates to an all-time low of 1.5 per cent in a bid to fend off a long and deep recession.

A handful of lenders said they would reduce their variable rate mortgages after the historic cut.

But most lenders were slow to announce whether they would be passing on the 0.5 per cent reduction to their standard variable rate (SVR) borrowers.

Just five lenders had said they would be cutting their SVR by the end of the day, with other groups keeping their rates under review.

HSBC, Lloyds TSB, Nationwide and Skipton Building Society are all passing on the full 0.5 per cent cut to their SVR customers from February 1, while Britain's biggest mortgage lender Halifax is reducing its rate by 0.25 per cent.

The Bank of England has now cut rates by a mammoth 3.5 percentage points since the beginning of October as concerns over a lengthy recession overshadow previous inflation fears.