Yesterday, the Abbey increased the interest rate on its tracker mortgage products, just two days before the Bank of England is due to meet to determine the base interest rate. This is an unusual move considering that experts are in general agreement that they expect the Bank of England’s Monetary Policy Committee to actually cut the interest rate. Indeed, some believe the interest rate could be cut by as much as a further 1 per cent.
This rather cynical move has come just days after Business Secretary Lord Mandelson admitted that despite the UK government’s £37 billion bail out plan, they are powerless to force banks to pass savings onto borrowers.
This is not the only bank to effectively snub the government in this way. Cash rich bank HSBC has also stated that it does not intend to pass on the full saving from a Bank of England base rate cut.
