Loans: Banks must pass on cuts or ‘face customer backlash’
Business Secretary Peter Mandelson has warned that banks may face a “customer backlash” if they do not pass on base rate cuts to their loan and mortgage customers, The Times reports.
Mr Mandelson said: “People want to feel the benefits of [base rate cuts]. And if it appears the banks are standing in the way of what the Government is doing, then I think many banking customers are going to be asking difficult questions of the banks.”
The news follows a warning from David Hodgkinson, chief operating officer of HSBC, that banks may not fully pass on further base rate cuts to their mortgages and other loan deals.
A spokesperson for Think Money said: “The loans market has not seen the full benefit of the base rate cuts we’ve had so far. It seems that banks are being cautious until market conditions improve. In this respect, a further base rate cut might not have an immediate impact on many kinds of loans, although it is a step in the right direction.
“But lending between banks is getting cheaper, so we could well see an improvement in both interest rates and availability of loans at some point in the near future.”
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Loans: Banks must pass on cuts or ‘face customer backlash’
financerss.co.uk
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