Banks shamed into cutting rates

7 November 2008
Critical media attention and government intervention has led to several big mortgage lenders cutting their standard variable rates in-line with the 1.5% Bank of England base rate cut.

Although only around 50% of lenders passed on October's 50 basis point cut, with many introducing smaller reductions, stern words from Gordon Brown and chancellor Alistair Darling seem to have shamed some banks into passing on the full 1.5% saving.

On Friday, Darling met with the heads of Britain’s biggest banks to put pressure on them to lower SVRs by the full 150 basis points.

Angela Knight, chief executive of the British Bankers' Association, says: "We know that many people are concerned about making ends meet in these difficult times and although the interest rate cuts will be welcomed by borrowers and home owners the banks have to balance the borrowing rates against offering competitive rates for savers."

Although nationalised lender Northern Rock has now cut its SVR by 1.5%, Bradford & Bingley (which is also under public ownership) has so far failed to do so.

For the full list of which lenders have passed on rates, click here.

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