Banks under pressure to cut rates
Lenders have come under pressure to make hefty cuts in their mortgage rates following the shock cut in interest rates by the Bank of England.
But the Council of Mortgage Lenders has responded by saying lenders will cut rates by 0.5%-1.5% in the coming weeks.
The Bank Rate was cut from 4.5% to 3% on Thursday and the chancellor has called on lenders to pass the rate reduction onto their borrowers.
So far, only Lloyds TSB and Abbey have said they will pass the cut on in full.
The CML warned that the precise level of the reductions would be a commercial decision for each individual lender.
Michael Coogan, director general of the CML said: “The problem banks have got is that they have limited funds and don’t have enough money to give to all the customers who may want them.”
“I think over the next few days and weeks we will see that the banks and building societies will move by anywhere between 0.5% and 1.5% - the individual decisions will be on the basis of assessing what they want for their savers as much as what they want for their borrowers,” he added.
Source: BBC News
April 29th, 2009 at 10:02 pm
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