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| Version 0 | Version 1 |
|---|---|
| Banks under pressure to cut rates | Banks under pressure to cut rates |
| (about 6 hours later) | |
| Lenders are coming under pressures to cut their mortgage rates following Thursday's shock cut in interest rates by the Bank of England. | Lenders are coming under pressures to cut their mortgage rates following Thursday's shock cut in interest rates by the Bank of England. |
| The Bank cut its base rate from 4.5% to 3%, the lowest level since 1955. | The Bank cut its base rate from 4.5% to 3%, the lowest level since 1955. |
| Chancellor Alistair Darling has called on banks to pass the rate cut onto their borrowers. | Chancellor Alistair Darling has called on banks to pass the rate cut onto their borrowers. |
| Only Lloyds TSB and Abbey have said they will pass the cut on in full so far, although other may make announcements later on Friday. | Only Lloyds TSB and Abbey have said they will pass the cut on in full so far, although other may make announcements later on Friday. |
| Almost all tracker mortgages have been withdrawn for new borrowers as lenders consider at what rates to reintroduce them. | Almost all tracker mortgages have been withdrawn for new borrowers as lenders consider at what rates to reintroduce them. |
| 'Fly in the ointment' | 'Fly in the ointment' |
| "I think it's essential that the banks do pass on the benefit of lower interest rates to people and to businesses," Mr Darling said. | "I think it's essential that the banks do pass on the benefit of lower interest rates to people and to businesses," Mr Darling said. |
| Chancellor Alistair Darling calls for banks to take action | Chancellor Alistair Darling calls for banks to take action |
| "Banks need to understand that they need to help their customers." | "Banks need to understand that they need to help their customers." |
| John McFall, chair of the Treasury Select Committee, put it more strongly. | John McFall, chair of the Treasury Select Committee, put it more strongly. |
| "The banks are the fly in the ointment," he told BBC News. | "The banks are the fly in the ointment," he told BBC News. |
| "The banks got themselves into this problem and it was the taxpayers who rescued them." | "The banks got themselves into this problem and it was the taxpayers who rescued them." |
| But in an interview with BBC political editor Nick Robinson, Mr Darling would not be drawn on whether he could force banks to cut rates, even those that are largely owned by the government. | But in an interview with BBC political editor Nick Robinson, Mr Darling would not be drawn on whether he could force banks to cut rates, even those that are largely owned by the government. |
| "As shareholders the government clearly has huge power," our correspondent said. | "As shareholders the government clearly has huge power," our correspondent said. |
| "However, as one Treasury insider put it to me, it's the power a Sainsbury shareholder has to raise concerns about pricing policy not the power to set the price of cabbages in Wigan." | "However, as one Treasury insider put it to me, it's the power a Sainsbury shareholder has to raise concerns about pricing policy not the power to set the price of cabbages in Wigan." |
| 'Under review' | 'Under review' |
| Before the rate cut, Lloyds TSB/Cheltenham and Gloucester announced that they would pass the cut on in full to Standard Variable Rate (SVR) customers. | Before the rate cut, Lloyds TSB/Cheltenham and Gloucester announced that they would pass the cut on in full to Standard Variable Rate (SVR) customers. |
| After the cut, Abbey announced it would also be passing it on to all of its existing customers on variable rate mortgages. | After the cut, Abbey announced it would also be passing it on to all of its existing customers on variable rate mortgages. |
| Other major lenders such as HBOS, Barclays and HSBC have said their variable rates are "under review". | Other major lenders such as HBOS, Barclays and HSBC have said their variable rates are "under review". |
| Nationwide, the UK's biggest building society, said it was "monitoring the markets" before making a decision. | Nationwide, the UK's biggest building society, said it was "monitoring the markets" before making a decision. |
| The problem, according to the Council of Mortgage Lenders, is that the key to mortgage costs is not the Bank of England's base rate but Libor - the London Interbank Offered Rate - which is the rate at which banks lend to each other. | The problem, according to the Council of Mortgage Lenders, is that the key to mortgage costs is not the Bank of England's base rate but Libor - the London Interbank Offered Rate - which is the rate at which banks lend to each other. |
| "This will be a key figure to watch in terms of assessing how much of the cut is likely to be passed on in rates offered on new tracker mortgages and in lenders' SVRs," said Ray Boulger, of mortgage brokers John Charcol. | "This will be a key figure to watch in terms of assessing how much of the cut is likely to be passed on in rates offered on new tracker mortgages and in lenders' SVRs," said Ray Boulger, of mortgage brokers John Charcol. |
| Friday's daily Libor figure will be closely watched - it will almost certainly still be well above the Bank of England rate, but the question is how far it will have fallen from Thursday's fix. | Friday's daily Libor figure will be closely watched - it will almost certainly still be well above the Bank of England rate, but the question is how far it will have fallen from Thursday's fix. |
| The figures, which are compiled by the British Bankers' Association, are released shortly after 1100 GMT. |