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| Banks face pressure on rate cut | Banks face pressure on rate cut |
| (about 3 hours later) | |
| Banks and building societies are coming under increasing pressure from MPs to pass on the latest cut in interest rates to their mortgage customers. | Banks and building societies are coming under increasing pressure from MPs to pass on the latest cut in interest rates to their mortgage customers. |
| Some of the major lenders made an immediate decision to pass on the 1% Bank of England rate cut to customers with a variable-rate mortgage. | Some of the major lenders made an immediate decision to pass on the 1% Bank of England rate cut to customers with a variable-rate mortgage. |
| The UK's biggest lender HBOS will only pass on 0.25 of a percentage point. | The UK's biggest lender HBOS will only pass on 0.25 of a percentage point. |
| A spokesman said the government had expected it to be run along commercial lines, which was what it was doing. | A spokesman said the government had expected it to be run along commercial lines, which was what it was doing. |
| Initially, it seemed that customers on tracker deals with the Nationwide would see only a 0.25 percentage point cut in interest on their repayments. | Initially, it seemed that customers on tracker deals with the Nationwide would see only a 0.25 percentage point cut in interest on their repayments. |
| But late on Thursday the UK's biggest building society said it was passing on the full one percentage point cut to existing tracker customers.See who has cut mortgage rates | But late on Thursday the UK's biggest building society said it was passing on the full one percentage point cut to existing tracker customers.See who has cut mortgage rates |
| The Halifax - part of HBOS with Bank of Scotland - has automatically passed Thursday's Bank of England rate cut on in full to those with tracker mortgages. | The Halifax - part of HBOS with Bank of Scotland - has automatically passed Thursday's Bank of England rate cut on in full to those with tracker mortgages. |
| Customers with a Halifax standard variable rate mortgage will see their rate fall from 5% to 4.75% on 1 January. | Customers with a Halifax standard variable rate mortgage will see their rate fall from 5% to 4.75% on 1 January. |
| FROM THE TODAY PROGRAMME More from Today programme | FROM THE TODAY PROGRAMME More from Today programme |
| The Halifax is benefiting from around £12bn of taxpayers' money as part of a government bailout. | The Halifax is benefiting from around £12bn of taxpayers' money as part of a government bailout. |
| Chancellor Alistair Darling made a fresh appeal to banks to pass on the new rates to help individuals and businesses. | Chancellor Alistair Darling made a fresh appeal to banks to pass on the new rates to help individuals and businesses. |
| "Banks must treat their customers fairly," he said. | "Banks must treat their customers fairly," he said. |
| "In the same way that banks expect their customers to stick to their side of the deal, customers should be able to expect that banks will stick to theirs." | "In the same way that banks expect their customers to stick to their side of the deal, customers should be able to expect that banks will stick to theirs." |
| The chancellor insisted that while there were "some pretty difficult conditions" ahead, the UK would get through the current tough times. | The chancellor insisted that while there were "some pretty difficult conditions" ahead, the UK would get through the current tough times. |
| 'Decent margin' | 'Decent margin' |
| Health Secretary Alan Johnson said on the BBC's Question Time that HBOS needed to explain its decision on rates. | Health Secretary Alan Johnson said on the BBC's Question Time that HBOS needed to explain its decision on rates. |
| "I'd want to know what the logic is behind that. We want these banks to continue to be effective and we want them to continue to ensure their own futures," he said. | "I'd want to know what the logic is behind that. We want these banks to continue to be effective and we want them to continue to ensure their own futures," he said. |
| "So I think we'd have to see what their rationale is, what the circumstances are in which they've made that announcement." | "So I think we'd have to see what their rationale is, what the circumstances are in which they've made that announcement." |
| But Shane O'Riordain, of HBOS, defended the bank's decision. | But Shane O'Riordain, of HBOS, defended the bank's decision. |
| He said: "I think it is worth remembering the government has said it expects our bank to be run on commercial lines, and that's exactly what we're doing. | He said: "I think it is worth remembering the government has said it expects our bank to be run on commercial lines, and that's exactly what we're doing. |
| "All we are simply doing is seeking to achieve a decent margin like any other business, nothing more and nothing less." | "All we are simply doing is seeking to achieve a decent margin like any other business, nothing more and nothing less." |
| HAVE YOUR SAYThe government should introduce a law which says all Bank of England rate cuts must be passed on by the banksDoris, ManchesterSend us your comments | HAVE YOUR SAYThe government should introduce a law which says all Bank of England rate cuts must be passed on by the banksDoris, ManchesterSend us your comments |
| Interest rate cuts might be good for mortgage-holders, but savers are likely to see their returns drop. | |
| Sir Howard Davies, the former deputy Governor of the Bank of England, said the government should stop trying to dictate terms to the banks. | |
| "The banks have got to raise money both from depositors and indeed from the inter-bank market," he said. | |
| He added that the balance was not the same for every bank, so they would take a slightly different attitude to whether they would pass it through. | |
| "I think that for the government to get involved in micro-managing the particular interest rate decision of particular individual banks is a mistake," he said. | |
| HSBC, Lloyds TSB/Cheltenham and Gloucester and Bristol & West have announced they will pass on the one percentage point cut in full to standard variable rate customers. | HSBC, Lloyds TSB/Cheltenham and Gloucester and Bristol & West have announced they will pass on the one percentage point cut in full to standard variable rate customers. |
| And the Royal Bank of Scotland, which is majority-owned by the taxpayer, has so far only committed to pass on the cut in full to business customers, saying it needed to strike a balance between borrowers and savers. | And the Royal Bank of Scotland, which is majority-owned by the taxpayer, has so far only committed to pass on the cut in full to business customers, saying it needed to strike a balance between borrowers and savers. |
| Lloyds TSB and HBOS also pledged to pass on the rate cuts to small business customers. | |
| Most existing tracker mortgage homeowners with the Yorkshire Building Society will not see the full cut because it has a floor, or collar, on its deals. | |
| Even before the Bank rate change, Lloyds TSB/Cheltenham and Gloucester announced that it would pass the cut on in full to standard variable rate (SVR) customers. | Even before the Bank rate change, Lloyds TSB/Cheltenham and Gloucester announced that it would pass the cut on in full to standard variable rate (SVR) customers. |
| However, it is obliged to do so, as it pledged in 2002 that its variable rates would never be more than two percentage points above the Bank rate. | However, it is obliged to do so, as it pledged in 2002 that its variable rates would never be more than two percentage points above the Bank rate. |
| Many SVR customers across the industry have been put on the variable rate when their fixed-rate deals came to an end. | Many SVR customers across the industry have been put on the variable rate when their fixed-rate deals came to an end. |
HOW MORTGAGE LENDERS RESPONDED | HOW MORTGAGE LENDERS RESPONDED |
| Lender SVR before Nov BoE decision SVR after Nov BoE decision Rate change (percentage points) SVR after Dec BoE decision Rate change HBOS 6.50% 5.00% -1.5 4.75% -0.25 Nationwide BS 6.19% 4.69% -1.5 4.00% -0.69 Abbey 6.94% 5.44% -1.5 Under review  Lloyds TSB/ C&G 6.50% 5.00% -1.5 4.00% -1 Northern Rock 7.34% 5.84% -1.5 Under review  Barclays 6.64% No change  5.49% -1.15 RBS 6.69% 5.19% -1.5 Under review  HSBC 6.25% 5.44% (5 Dec) -0.81 4.44% -1 Alliance & Leicester 6.94% 5.84% -1.1 Under review  Bradford & Bingley 7.09% 5.59% (7 Dec) -1.5 Under review  Bristol & West 6.59% 5.49% -1.1 4.49% -1 Britannia BS 6.30% 5.30% -1 Under review  Yorkshire BS 6.60% 5.60% -1 Under review  GE Money 10.39% 8.44% -1.95 Under review  Coventry BS 6.84% 5.34% -1.5 Under review  Standard Life 6.59% Under review  Under review  Clydesdale & Yorkshire 6.64% 5.14% -1.5 Under review  Chelsea BS 6.94% 5.79% (31 Dec) -1.15 Under review  Skipton 6.45% 5.95% -0.5 Min 5% Min -0.95 One Account (RBS) (avg) 6.55% 5.55% -1 Under review  SVR: Standard Variable Rate. All initial changes on 1 December unless stated. All the latest changes on 1 January. | Lender SVR before Nov BoE decision SVR after Nov BoE decision Rate change (percentage points) SVR after Dec BoE decision Rate change HBOS 6.50% 5.00% -1.5 4.75% -0.25 Nationwide BS 6.19% 4.69% -1.5 4.00% -0.69 Abbey 6.94% 5.44% -1.5 Under review  Lloyds TSB/ C&G 6.50% 5.00% -1.5 4.00% -1 Northern Rock 7.34% 5.84% -1.5 Under review  Barclays 6.64% No change  5.49% -1.15 RBS 6.69% 5.19% -1.5 Under review  HSBC 6.25% 5.44% (5 Dec) -0.81 4.44% -1 Alliance & Leicester 6.94% 5.84% -1.1 Under review  Bradford & Bingley 7.09% 5.59% (7 Dec) -1.5 Under review  Bristol & West 6.59% 5.49% -1.1 4.49% -1 Britannia BS 6.30% 5.30% -1 Under review  Yorkshire BS 6.60% 5.60% -1 Under review  GE Money 10.39% 8.44% -1.95 Under review  Coventry BS 6.84% 5.34% -1.5 Under review  Standard Life 6.59% Under review  Under review  Clydesdale & Yorkshire 6.64% 5.14% -1.5 Under review  Chelsea BS 6.94% 5.79% (31 Dec) -1.15 Under review  Skipton 6.45% 5.95% -0.5 Min 5% Min -0.95 One Account (RBS) (avg) 6.55% 5.55% -1 Under review  SVR: Standard Variable Rate. All initial changes on 1 December unless stated. All the latest changes on 1 January. |
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