Nationwide Building Society will not pass on any more Bank of England base rate cuts to its tracker mortgage customers, it has revealed.
One of the country's biggest mortgage lenders has announced that it will not pass on any further Bank of England base rate cuts to tracker mortgage holders, in a move that could anger the government.
Nationwide Building Society has revealed that its deals have a clause which means that they do not need to follow the Bank's rate under a certain value. The Bank's monetary policy committee is meeting again next week, with analysts expecting further cuts of 0.5 to 0.75 percent.
The government has been keen for lenders to pass on cuts in an effort to boost the housing market and the wider economy. A spokesman for the Treasury said: "The chancellor has repeatedly made clear that he expects lenders to do their best to help their customers through these difficult times."
However, Nationwide countered that it was trying to protect its savings customers from further aggressive cuts. Following the Bank's one percent cut in December - which, because of the clause, the bank did not actually have to pass on - its savings accounts rates were reduced by 0.87 percent on average.
"Savings rates are at an historic low and this move means we will not be forced into a position where we could have to cut savings rates more aggressively than we would otherwise like to," said a spokeswoman.
