More lenders announce rate cuts

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by Kay Mitchell

After the Bank of England’s 1.5% interest rate cut last week, there were concerns that lenders would not pass on the rate cut to customers.

As a result, bank chiefs were summoned to Downing Street where Chancellor Alistair Darling demanded that banks pass on the rate cut to customers with immediate effect.

Shortly after the rate cut, Abbey, Bradford & Bingley and Lloyds TSB announced that they will pass the rate cut on in full to mortgage borrowers on its standard variable rate (SVR).

The majority of the UK’s leading banks have now caved in to Government and media pressure to pass on the full rate cut to borrowers with the Nationwide, RBS/NatWest and HBOS following suit.

Today, Coventry Building Society, along with Clydesdale and Yorkshire Bank announced their intention to make a 1.5% cut to standard variable rate (SVR) customers.

Coventry will reduce its SVR from 6.84% to 5.34% on 1 December, while Clydesdale and Yorkshire’s SVR will fall to 5.14%, also on 1 December.

Barclays and HSBC are yet to follow suit, however, HSBC’s chief executive Michael Geoghegan today said he would not be pressured by the Government into passing interest rate cuts on to customers.

The Bank of England’s decision to slash interest rates by 1.5% takes interest rates to 3% – the lowest level in over 50 years.