The nation's mortgage lenders have been told by the chancellor of the exchequer to pass on yesterday's interest rate cut.
The chancellor of the exchequer Alistair Darling has told the country's banks that they "must treat their customers fairly" by passing on the Bank of England's interest rate cut.
Yesterday's reduction to two percent means that the Bank's rate is at its lowest since 1951 and has never been lower since the Bank was founded in 1694. The move has been widely seen as an effort to stimulate the economy by making loans more affordable for consumers and businesses.
Mr Darling said: "In the same way that banks expect their customers to stick to their side of the deal, customers should be able to expect that banks will stick to theirs." HSBC and Lloyds TSB/Cheltenham and Gloucester are among those who have announced that the cut will be passed on.
However, the nation's biggest lender, HBOS - made up of the Halifax and Bank of Scotland - has said it will only provide a cut of 0.25 percent for its SVR mortgage customers. The Halifax is one of the banks which have benefitted from the government's bailout package, receiving roughly £12 billion from the deal.
But Shane O'Riordain, a spokesman for HBOS, pointed out that it had passed on all of the recent cuts, including November's 1.5 percent reduction, while many lenders had not. He added: "Halifax has balanced the interest of its customers with the commercial imperative of managing its business in a sustainable and prudent fashion."
