Immediately after the announcement some lenders, including HSBC and Lloyds TSB, announced they would be passing on the full cut to their borrowers.
“The key issues for homeowners and businesses are availability of finance and affordability. HSBC has already pledged to lend up to £15 billion in mortgages this year, double what we lent in 2007 and with this latest cut we are doing everything in our power to ensure mortgages remain affordable,” said HSBC UK managing director Paul Thurston “HSBC is open for business.”
However, the rate cut was not praised by everyone. “Cuts in the base rate are starting to look futile and even-counter productive. We have reached the point now where only the fortunate few are really benefiting and savers are really starting to suffer. What lenders need more than ever are savers’ deposits, and they are not going to get them if they can only offer paltry rates of interest. It is lack of credit that is hurting the market, and mere rate cuts are not going to help directly,” said Ben Thompson, mortgages director at Legal & General.
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