Mortgage borrowers are unlikely to see a reduction in their repayments any time soon, it has been suggested.
A senior banking chief has warned that mortgage lenders may not automatically reduce interest rates on home loans in line with an expected cut in the base rate this week.
According to the Guardian, David Hodgkinson, the chief operating officer at HSBC, said that while banks will do their best to pass on any reductions, they cannot make a "categorical commitment".
His comments come before the Bank of England's monetary policy committee announces its next base rate decision on Thursday. It is widely predicted that the group will implement another large cut following last month's half percentage point reduction, which brought rates to 4.5 percent.
In response to calls for an ensuing cut in mortgage rates, Mr Hodgkinson said: "Clearly if interest rates are down significantly, the rates for borrowing will go down."
However, he dashed the hopes of borrowers looking forward to cheaper home loans by adding: "I am not going to say it is absolutely linear, because it depends on the particular [situation] and the risk."
Liberal Democrat Treasury spokesman Vince Cable criticised mortgage lenders over their stance, insisting that they are "only too happy" to pass on increases in the base rate. He said the system must work both ways if consumers are to get a fair deal.
