Alistair Darling has urged mortgage lenders to cut their rate after the Bank of England cut interest rates by 1.5% to 3%. The bank’s cut takes it to its lowest level since 1955 and the government is calling for banks to pass on the cut to its borrowers.
So far both Abbey and Lloyds TSB have said that they will be passing on the rate cut to its borrowers, but other banks may follow suit later today.
In a statement Alistair Darling said, “I think it’s essential that the banks do pass on the benefit of lower interest rates to people and to businesses.”
According to the Council of Mortgage Lenders, mortgage costs are not necessarily set by the Bank of England’s rate, rather it is the Libor rate (London Interbank Offered Rate); the rate at which banks lend to other banks. The latest Libor figures are set to be released this afternoon.
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