Tesco chief 'asked for rates cut'
Updated on 08 November 2008
The head of Tesco called for a cut in interest rates at a private meeting with the Bank of England's governor.
The meeting between Sir Terry Leahy and the Bank's Mervyn King took place in the days before Thursday's surprise 1.5% interest rate cut, according to The Guardian.
Sir Terry, chief executive of Britain's biggest supermarket chain, reportedly argued that the Monetary Policy Committee (MPC) should make a big cut to the cost of borrowing to help restore consumer confidence.
Tesco would not confirm whether or not the meeting took place, but Lucy Neville-Rolfe, Tesco's director of legal affairs, said: "The MPC did a very brave thing. Our concern is to make sure the banks pass the rate cut on."
Thursday's decision by the Bank of England to slash the base rate to 3% - its lowest level for more than 50 years - appeared to take the banking sector by surprise.
It resulted in a scramble by institutions to withdraw tracker products, which automatically track the base rate, with 33 lenders pulling their entire range of the deals for new customers to reprice them.
Banking chiefs were hauled in front of Chancellor Alistair Darling on Friday morning and told they must pass on the 1.5% interest rate cut to customers "as soon as possible".
Nationalised banks Northern Rock and Bradford & Bingley were later among a host of lenders to announce they would pass on the cut in full to mortgage customers.
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