Of course, it could be worse. Citi, for example, has actually raised its rates on credit cards despite the prime rate dropping from 8.25% to 4%. Americablog reader DM said that Citi explained that the rate increase was due to "market conditions" yet the market back on planet earth says those rates should be declining, not increasing. This is how Citi treats its good customers so one can imagine how the rest are treated.
In the UK, banks are lowering rates to customers for borrowing, though not by the full amount that's been passed on to the banks. British politicians - strange as it may seem to us - are bothering to make a fuss and demand the full amount to be passed on to borrowers. As in the US, banks in the UK have also been handed a lifeline courtesy of the taxpayers, so to hit clients both ways seems outrageous to the Brits. Funny people there.
Britain's bailed-out high street banks risked the wrath of the government last night after they refused to pass on to all their mortgage customers the full benefits of the Bank of England's decision to cut borrowing costs to the lowest level since 1951.
Despite joint pressure from Gordon Brown and the chancellor Alistair Darling to match the one percentage point reduction in the bank rate to 2%, both the Royal Bank of Scotland and the Halifax said their standard variable rates (SVR) would not be reduced by the full amount.
Halifax, Britain's biggest mortgage lender, said it would trim only a quarter point off its SVR home loan although customers on tracker mortgages would receive the cut in full, worth £82 a month on a £150,000 mortgage. RBS said it would "strike an appropriate balance" between the needs of borrowers and savers, but would pass on the cut in full to business customers.
The cuts in mortgage rates were triggered by the announcement from Threadneedle Street that it had cut the bank rate to its joint lowest in history in an attempt to prevent the economy sliding deeper into recession.
Darling said last night that borrowing costs had come down by a total of three percentage points in two months. "This will help people and businesses - and I want to see these cuts passed on."
