Tuesday 15th April 2008
Gordon Brown meets mortgage lender bosses to demand that they pass on rate cuts.
Wednesday 16th April 2008
Halifax announces that they are increasing fixed and tracker rates by 0.5% for new customers.
Gordon, Gordon, Gordon... where do we start. Firstly lenders are passing on rate cuts to existing borrowers. If you are on a tracker rate then your pay rate comes down automatically, a discounted rate as the lender reduces their Standard Variable Rate your pay rate comes down and you are unaffected on a fixed rate.
Until your deal expires. Then you must renew on the higher new deals. This is where the problem lies. The lenders get their moeny in part from the money markets and the inter-bank rate remains high.
So Gordon needs to get this rate down. This is the Bank of England's area not government. More money needs to be put into the market to reduce this rate and simply not enough is being done.