Newspaper article Evening Chronicle (Newcastle, England)

Banks Urged to Slash Rates; PRESSURE BUILDS TO PASS ON INTEREST CUT

Newspaper article Evening Chronicle (Newcastle, England)

Banks Urged to Slash Rates; PRESSURE BUILDS TO PASS ON INTEREST CUT

Article excerpt

BANKS, including the UK's biggest lender, are under growing pressure today to reduce their interest rates in line with the Bank of England's massive 1.5% cut.

Yesterday the Bank stunned the City by opting for the biggest rate cut since 1981, at a time when the base rate is relatively low.

Lloyds TSB immediately announced it was following suit - though it is constrained by a pledge to keep its rates within 2% of the Bank of England's base rate - and by the end of the day Abbey had done likewise.

Halifax, the UK's biggest lender, said yesterday whether it was to pass on the 1.5% cut was "under consideration" as politicians clamoured for banks to toe the line in return for the billions of pounds the Government has pumped into propping them up in the aftermath of the credit crunch.

Banks, though, are wary of committing themselves to interest rates cuts while the Libor (the London Interbank Offered Rate) - the rate at which banks lend to each other - remains high and while jitters persist following the financial turmoil. …

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