9
Jan
Banks have duty to pass on rate cuts, says PM
Mortgage lenders who have not cut interest rates in line with a
reduction in the base rate of interest are in breach of their duty
to their customers, the Prime Minister has said.
Data from financial website Moneyfacts.co.uk released yesterday
revealed that one in five UK lenders has failed to pass on the Bank
of England's recent 0.25 per cent cut in full.
However, in his monthly press conference Gordon Brown has said that
"where interest rate cuts happen, buildings societies and banks
have a duty to take that into account".
His comments were echoed by the Chancellor Alistair Darling, who
stressed the benefit of cutting rates to UK homeowners who may be
struggling with repayments.
He said: "I would hope if interest rates continue to come down,
then the benefit of that reduction would be passed on to mortgage
payers because that would benefit them and their families."
The base rate of interest currently stands at 5.5 per cent after
December's cut.
