Mortgages -
Provider fails to pass rate cut on to customers - 10/12/2007
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In a sign that more interest rate cuts might soon be on their way, a leading UK mortgage lender has declined to pass on last week's full cut on to its customers.
The Times reports that Egg is to lower its SVR by 0.15 per cent from New Year's Day, despite the Bank of England's 0.25 per cent cut last week - signifying the tough economic conditions faced by lenders in the ongoing credit crunch.
Egg's decision differs from that of Halifax and Nationwide - both of which have passed on the full 0.25 per cent cut to their SVRs.
Speaking the newspaper, James Cotton at brokers London & Country said: "While Egg is the first to publish its intention not to pass on the full quarter-point cut, we expect more lenders than usual to do the same.
"However, this time around we do anticipate that the majority will follow the lead set by the bigger lenders and pass on the full amount."
Mr Cotton added that mortgage providers will also be taking into account the likelihood of further rate cuts in the near future when deciding on their SVRs.
A Reuters poll commissioned in the wake of the Bank of England's rate decision showed a clear majority of economists predicting a further cut in the first quarter of 2008.
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