Banks pass on lending cuts

Friday 7th November 2008

More high street lenders have cut their lending rates after the 1.5 per cent interest rate cut from the Bank of England yesterday.

Northern Rock joined Nationwide, HBOS and the RBS/NatWest group in passing on the reduction to their customers today.

That followed announcements by Lloyds TSB and Abbey yesterday.

Prime minister Gordon Brown said the 1.5 per cent cut to three per cent by the Bank's monetary policy committee yesterday was "decisive action".

And, speaking at a press conference in Brussels, he added: "I welcome the fact that a number of British banks have decided to pass on the interest rate cut to customers, to families and to businesses."

Six banks have cut their in-credit interest rates in the last week, however, prompting accusations of money-grabbing.

Price comparison website uSwitch's personal finance manager Louise Bond said: "This revenue-boosting move by six providers to reduce in-credit current account interest rates conveniently came in a week when headlines were focused on mortgage and savings rates.

"Those cynics among us could be forgiven for thinking that, whilst attention was diverted towards the base rate decision, providers were hoping that these rate reductions would slip unnoticed under the radar." ADNFCR-1783-ID-18865977-ADNFCR

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