Banks Not Passing On Home Loan Interest Cuts

The Bank of Englands Quarterly Bulletin proves that High Street banks have simply not been passing on base rate cuts for home loans fully.

Mortgage rates have been kept back at the record low of 0.5 % since March 2009 (while the UK was in the midst of its tough recession in decades), but despite considerable time, banks are not turning over this saving straight away to borrowers.

August numbers have presented that banks are billing high overdraft rates at typically 19.1 % - which is 38 times more the 0.5 % rate of interest.

The written report pronounced that during the recent financial doom and gloom the bank rate was cut down sharply, but generally the interest rates appointed on new loaning to homes did not descend by appropriate levels and indeed some interest levels rather unfairly went up. 

In the influential study, the Bank of England offered many theories as to why this was materialising.
Foremost, it told analyst in the home loan sector that banks are looking to promote their working capital reserves, so as to follow with fresh, tougher rules imposed by the government.