Interest rates fall in Eurozone, Sweden and New Zealand
by Gill Montia
The 1% cut in the Bank of England’s base rate announced yesterday was accompanied by a record reduction in the key interest rate of the European Central Bank (ECB), which slashed rates by 0.75% in an effort to address the worsening economic outlook for the eurozone’s 15 economies.
The ECB’s main rate is now down to 2.50%, compared with the UK base rate of 2%.
Meanwhile, Sweden’s central bank has reduced rates by a record 1.75%, to 2%, the largest reduction in over 15 years.
As a result, Norway’s central bank is expected to cut its key interest rate (currently 4.65%) by over 1%, later this month.
Further afield in New Zealand rates came down 1.5%, to a five-year low of 5%.
In the UK the base rate cut has so far met with a mixed response from mortgage lenders.
Despite pressure from Government Ministers, Halifax and Nationwide are opting not to pass on the full reduction to customers with standard variable rate loans.
So far, HSBC, Bristol & West, Lloyds TSB and its lending arm, Cheltenham & Gloucester, have all pledged to cut their SVRs by the full 1%.
Lloyds TSB will also be reducing some of its commercial loan rates by the full amount.
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