Brown tells banks to pass on rate cuts ? commercial mortgages

11 January 2008

The prime minister is urging mortgage lenders to pass on the effects of the Bank of England''s interest rate cuts to their customers.

Gordon Brown and Chancellor of the exchequer Alistair Darling said lenders had a duty to do so after it was found that many lenders had not brought down their commercial mortgages despite the monetary policy committee''s rate cut last month.

In December the Bank of England cut rates by 0.25 per cent to 5.5 per cent and this month the Bank decided to keep rates on hold.

But it was revealed that nearly one in five lenders have not cut their rates in line with the monetary policy committee''s decision.

Mr Brown said at a news conference earlier this week: "I think where interest rate cuts happen the building societies and banks have a duty to take that into account."