photo credit: lollerkeet
More pressure is being brought to bear on some of the UK’s biggest lenders of investment property loans after the Bank of England cut interest rates to two per cent.
Politicians are now demanding banks pass on the cut to borrowers with variable rate mortgages.
The one per cent reduction was the second in two months after officials dropped the rate by 1.5 per cent in November.
Among the first to react were banks Lloyds TSB and HSBC, who passed on the one per cent in full.
Following the cut, which takes the rate to two per cent, prime minister Gordon Brown said:
“I welcome the fact that interest rates have come down today.
“If the banks pass the interest rate reduction on, and I hope and believe that they should do so, then it’s of benefit to homeowners and businesses right across the country.”
Industry experts broadly welcomed the move, but some said they wanted more action to be taken.
The Association of Mortgage Intermediaries (AMI) said the cut was a sign the Bank
“recognises the seriousness of the situation we face”.
But Chris Cummings, director general of AMI, added:
“On its own, this move will not have the positive effect we need to get the mortgage market lending again.
“Revitalised mortgage lending is vital if we want to increase consumer access to finance.”
Lenders urged to pass on rate cut
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