No more rate cuts from us, Banks tell Darling

10/11/2008

Lenders won't make mortgage repayments any cheaper in future - even if the Bank of England imposes more interest rate cuts.

Executives from leading high street banks are thought to have told chancellor of the exchequer Alistair Darling that last week's rate reduction was a "line in the sand", the Times reports.

On Thursday, the Bank of England reduced its lending rate from 4.5 to just three per cent - its lowest level since 1955.

With the credit crunch putting many people's personal finances under strain and leading to a bigger repossession risk, the government has put pressure on banks to pass interest rate cuts on in full.

Although most have done so, the executives reportedly said to the chancellor at a meeting last week that there would be no further reductions.

One un-named banker said: "Base rates are now so low that our margins are desperately small.

"This point was made quite clear to the chancellor of the exchequer by several of the executives - we are not charities."

Tags; Debt Management and Banking, Young Family Finances, Recent Graduate Debt,

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