Bank of England governor Mark Carney has said there is “no excuse” for high street lenders not to pass yesterday’s cut in interest rates on to customers – and at least some of the major lenders are heeding his warning.
HSBC has said it will pass the 25 basis point cut on to all of its customers with tracker mortgages that shadow moves in the BoE base rate. Meanwhile, customers with its standard variable rate mortgage will see their interest rate reduced from 3.94 per cent to 3.69 per cent at the start of next month. That is, of course, still far above the new BoE base rate of 0.25 per cent.
HSBC said on Friday:
Following the Base Rate announcement yesterday we have passed on the full reduction to customers with tracker mortgages today. We will also be passing on the reduction to mortgage customers on our Standard Variable Rate, which is already one of the lowest in the market and will reduce from 3.94% to 3.69% with effect from 1st September.
Santander UK and Barclays immediately announced cuts to their standard variable rate mortgages yesterday.
Determined to enhance the transmission of it monetary policy moves to the real economy, the BoE also unveiled a new “term funding scheme” – a £100bn facility to provide cheap loans to commercial lenders to help them lend to households and businesses at low rates.