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| Version 4 | Version 5 |
|---|---|
| Brown pressures banks over rates | Brown pressures banks over rates |
| (30 minutes later) | |
| Prime Minister Gordon Brown says the government has met with bankers in a bid to ensure that lenders pass on Thursday's cut in interest rates. | Prime Minister Gordon Brown says the government has met with bankers in a bid to ensure that lenders pass on Thursday's cut in interest rates. |
| He said the Treasury and the Bank of England had taken action to help lenders and it was now their turn to take the lead. | He said the Treasury and the Bank of England had taken action to help lenders and it was now their turn to take the lead. |
| The Bank of England's official rate was cut from 4.5% to 3% on Thursday in a move that shocked markets. | The Bank of England's official rate was cut from 4.5% to 3% on Thursday in a move that shocked markets. |
| So far, only Lloyds TSB and Abbey have said they will pass the cut on in full | So far, only Lloyds TSB and Abbey have said they will pass the cut on in full |
| "We are determined to get banks to resume lending," Mr Brown said. | "We are determined to get banks to resume lending," Mr Brown said. |
| Chancellor Alistair Darling held a breakfast meeting with bank bosses this morning to press the government's case. | Chancellor Alistair Darling held a breakfast meeting with bank bosses this morning to press the government's case. |
| The meeting, held at the Treasury, has now finished and the banks attending were thought to include Abbey, Barclays, HBOS, HSBC, Lloyds TSB, Nationwide, RBS and Standard Chartered. | The meeting, held at the Treasury, has now finished and the banks attending were thought to include Abbey, Barclays, HBOS, HSBC, Lloyds TSB, Nationwide, RBS and Standard Chartered. |
| 'Commercial decision' | 'Commercial decision' |
| The Council of Mortgage Lenders (CML) said lenders will cut their rates by 0.5 to 1.5 percentage points in the coming weeks. | |
| The CML warned that the precise level of the reductions would be a commercial decision for each individual lender. | 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. | 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. | "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. |
| Almost all tracker mortgages have been withdrawn for new borrowers as lenders consider at what rates to reintroduce them. | |
| Duty | |
| Conservative Party leader David Cameron said that banks that had taken part in the government's bail-out programme should be forced to pass on Thursday's interest rate cut. | |
| Lloyds TSB, HBOS and Royal Bank of Scotland, which owns NatWest, have taken government cash to strengthen their finances. | |
| He said that other lenders had a duty to follow suit. | |
| The problem, lenders say, 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. | |
| 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 before 1200 GMT. |