photo credit: paolo màrgari
Pressure is growing on the UK’s biggest banks to pass on last week’s mammoth 1.5 per cent interest rate cut to consumers.
The Bank of England reduced the base rate on Thursday, taking it down to just three per cent, in a move welcomed by property investment-related groups.
But trade unions and estate agent groups fear borrowers will miss out even though some of the country’s biggest names in banking were recently rescued by taxpayer-funded bail outs.
Trades Union Congress (TUC) head of economics Adam Lent said:
“The real challenge is to ensure that these cuts are passed on to both business and mortgage customers.
“Too many banks seem to be more interested in hanging on to their bonuses than using the huge bail out from the taxpayer for its proper purpose of getting the economy moving again.”
The National Association of Estate Agents (NAEA) also said the rate cut was “good news for the housing market” and called on banks to pass on the reduction.
Although there is no mechanism in place to force banks to pass on the reduced rate, the government has already ramped up political pressure.
A survey by Findaproperty.com revealed 54 per cent of people think banks should be forced to pass it on with the remaining 46 per cent saying the cut would underpin high house prices which they believe should fall further.
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