Banks ‘must pass on lower rates’ to debt-laden borrowers

Banks have been urged to pass on lower prices to borrowers in light of recent reductions in rates.

Lenders must provide some debt help to customers after the recent Bank of England base rate cut and a fall in the London Interbank Offered Rate (Libor), Darren Cook from Moneyfacts has claimed.

The Libor figure – the interest rate at which City banks lend to each other – dropped this week, prompting Mr Cook to call for lenders to ease the pressure on homeowners.

He remarked: “The cost of finance to the banks looks like it is becoming cheaper now … they need to pass that onto the consumer.”

So far, some lenders have been unable to pass on the Bank of England’s cut to borrowers due to difficult market conditions, he explained.

But the fall in the Libor rate should help to alleviate the problem, Mr Cook concluded.

On October 20th, this figure dropped from 6.16 per cent to 6.11635 per cent, according to the British Bankers Association.

By Jamie Price