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MPs urges banks to pass on interest rate cuts

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  • MPs urges banks to pass on interest rate cuts

    Last month, in a co-ordinated move with other banks, the Bank of England’s Monetary Policy Committee (MPC) slashed UK interest rates from 5% to 4.5%.Central banks in the US, Japan and China have all cut interest rates in the last week in a bid to fight off a recession. Many analysts believe that the Bank [...]

    More: MPs urges banks to pass on interest rate cuts

  • #2
    MP's perhaps don't understand exactly how the mortage market works. It isn't as simple as passing on the rate cut on. Although I'm sure I've been guilty of making such statements myself at times. Lenders source their funds from moneymarkets or deposits. High rates are needed for deposits and LIBOR is over 1% above base currently and determined through demand and supply. The base rate won't necessarily make it any cheaper for lenders and therefore won't necessarily effect mortgage rates.