UK banks defy to pass on interest cut - clash with Gordon Brown

Gordon Brown was on a collision course with the banks on Friday night after major lenders openly defied calls by the prime minister to pass on this week’s cut in interest rates in full.

The stance by the banks prompted opposition party attacks on Mr Brown’s £37bn taxpayer-funded recapitalisation of the sector, increasing the pressure on the government to find some catalyst to free up lending.

Lloyds TSB and HSBC are the only lenders to have passed on in full to their mortgage borrowers this week’s one percentage point cut in the base rate by the Bank of England.

HBOS, Nationwide and the Royal Bank of Scotland have announced that they will pass on just a fraction of the cut to customers on their standard variable rates. Northern Rock, which is 100 per cent owned by the state, has not changed it standard variable rate of 5.84 per cent.

“Northern Rock is the one bank you would think should be passing on the full cut but it is still sitting on a very high SVR,” said Ian Gray at the brokers largemortgageloans.com.

http://www.ft.com/cms/s/0/3c6d97c2-c304-11dd-a5ae-000077b07658.html?nclick_check=1

That´s middle finger policy...