Yahoo Finance Banks Jump On Interest Cut Bandwagon
Banks have been responding to the Bank of England's interest rate cut but set out different ways of passing-on the 0.25% reduction to customers.
On Thursday, the Bank's governor Mark Carney , said lenders had "no excuse" not to pass on the rate cut to households, creating a flurry of reaction from a handful of banks.
HSBC said it was to pass on the base rate cut to customers on its tracker mortgage from Friday, and extend savings to standard variable rate (SVR) mortgage borrowers from the beginning of September.
Europe's largest bank stated: "Our standard variable rate will reduce from 3.94% to 3.69% with effect from 1 September."
Santander said it would also pass on the reduction to customers on its SVR from 1 September, and was also reviewing its current account interest rates, stating that rates on existing savings accounts would not be reduced by more than 0.25%.
Barclays (LSE: BARC.L - news) plans to implement the reduced rates to customers with base rate tracker mortgages and SVR deals from the start of September.
Lloyds banking group (Other OTC: LLOBF - news) has indicated that all variable rate products that track the Bank of England base rate will be reduced by 0.25% from September.
A spokesman said: "The Bank of England base rate is only one of a number of factors that we take into account when reviewing interest rates.
"The 0.25% reduction will form part of the ongoing rate reviews across our product ranges."
RBS (LSE: RBS.L - news) has committed to reduce the rate to all customers on base rate linked products and Nationwide building society (LSE: CCDS.L - news) has said it will pass on the decrease to existing base mortgage rate, standard mortgage rate and tracker mortgage customers.
The base rate cut is the first in seven years, and means that, while homeowners could see a small dip in their mortgage repayments, those with savings face an even smaller return on their money.
The Bank has signalled that rates will be reduced further later in the year if the initial cut does not initiate the growth in the economy that it expects (Other OTC: UBGXF - news) .
