UK Money News
7th February 2008
Lenders 'have not passed on last rate cut'
Many mortgage holders have not experienced an easing in repayment costs despite the pre-Christmas cut in the base rate of inflation, it has been revealed.
In December, the Bank of England’s monetary policy committed trimmed the base rate of inflation by 0.25 per cent, bringing it down to 5.5 per cent.
However, the benefit of this has not been passed on by ten building societies and banks, including Nationwide, Royal Bank of Scotland and Alliance and Leicester, the Telegraph reports.
In fact, the average mortgage rate now stands at 5.93 per cent, compared with 5.66 per cent in May last year when the base rate was last at 5.5 per cent.
Eddie Weatherill, chairman of the campaign group the Independent Banking Advisory Service, criticised the banks over their failure to pass on the cut and accused them of safeguarding their profits.
He told BBC Online: "Over the last decade the banks have used interest rate changes to massage their own rates.
"When the official rate goes up, they are quick to move. When it goes down, they are slow to pass on the cut to their customers. It is profiteering, and consumers end up the losers."
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