Lenders pass on full rate cut
Updated on 07 November 2008
A flurry of lenders have announced they will be passing on the surprise interest rate cut in full to their mortgage customers.
Britain's biggest building society Nationwide, Halifax, Royal Bank of Scotland, NatWest and Scottish Widows all said they would be reducing their standard variable rate by 1.5%.
They join Lloyds TSB, which also lends under the Cheltenham & Gloucester brand, and Abbey, which both announced cuts yesterday.
Other banks are now expected to follow suit following the announcements from four of the country's biggest lenders.
The reductions come after the heads of the main high street lenders were summoned to a breakfast meeting at the Treasury at which they were urged to drop their mortgage rates.
Chancellor Alistair Darling told banking chiefs to pass on the interest rate cut to customers "as quickly as possible", following the shock move by the Bank of England to slash the base rate to 3% - its lowest level for more than 50 years.
The Conservative Party also urged the Government to force nationalised banks - Northern Rock and Bradford & Bingley - to lower their rates.
Tory leader David Cameron said: "The interest rate should be passed on. If they do not, further action may be necessary."
He added: "The Government owns some of these banks now, so they can take steps."
Banks also scrambled to withdraw their tracker products following the steep cut, with 33 lenders now pulling their entire range of the deals, which automatically track the base rate, for repricing.
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