BRITAIN'S banks bowed to huge public and political pressure today to slash mortgage rates for millions.
After a tense meeting with Chancellor Alistair Darling, the high street's leading names agreed to pass on "all, or most" of the Bank of England's shock 1.5 per cent base rate cut.
Treasury sources said that the bosses from Royal Bank of Scotland, Barclays, LloydsTSB, HBOS, HSBC, Nationwide and Standard Chartered all caved in after being read the riot act by Mr Darling over their failure to respond swiftly to help hard-pressed homeowners.
Crucially, the move came as the three-month inter-bank lending rate, or Libor, fell by more than one per cent, from 5.561 to 4.496 per cent.
Until now, LloydsTSB and Abbey were the only lenders to drop their standard variable rates following the Bank of England's move yesterday to reduce the base rate to three per cent, the lowest in 53 years.
However, hundreds of thousands of people with tracker mortgages were warned today they will not benefit from any future rate reductions. Lenders can now use small-print clauses in contracts to stop passing on cuts.
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Sunday, November 9, 2008
Banks finally shamed into 1.5 per cent rate cuts
Friday, October 10, 2008
Darling blamed as Iceland’s bank troubles spiral
Iceland today turned on Britain's Chancellor Alistair Darling as a third bank was nationalised.
Kaupthing, which owned City investment bank Singer & Friedlander and UK internet bank Kaupthing Edge, said its board had resigned and handed control to the Icelandic Government.
The declaration came as the London stock market gave a half-hearted welcome to the Government's £500 billion bail-out plan for High Street banks and yesterday's emergency half-point cut in interest rates.
The FTSE 100 index of leading shares rose 67.62 points to 4434.31.
But in Iceland the crisis continued to spiral. Landsbanki was put into receivership earlier this week and Glitnir followed yesterday. Kaupthing had been offered a €500 million (£390.7 million) loan by the government, led by Prime Minister Geir Haarde.
