Brown wants rate cuts passed on

Wednesday, 5 November 2008 12:00 AM

Gordon Brown appealed to UK banks to pass on any interest rate cuts from the Bank of England in parliament this lunchtime.

Speaking during prime minister's questions, Mr Brown said: "We want the banks and building societies to pass on the interest rate cuts to their mortgage holders."

The prime minister also confirmed further interest rate cuts were likely.

"Interest rates have been cut from 5.75 per cent to 4.5 per cent and the Bank has said there is more scope for interest rates cuts," he said.

He added the cost of borrowing to consumers could drop following on from the government's bank rescue package

"What we have being trying to do - if I may explain to the Conservatives - is get the liquidity into the system, recapitalise our banks, and then get them to resume the lending which is necessary.

"The LIBOR rate has gone down from 6.25 per cent to 5.25 per cent, we are starting to make progress."

The prime minister's comments follow those yesterday from trade secretary Peter Mandelson, who also called on banks to follow the line set by the Bank of England.

He said: "When official rates are cut, it is not unreasonable for customers to expect to see some benefits.

"If it appeared the banks were standing in the way. many banking customers would be asking some difficult questions of the banks."

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• economic policy
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• economy
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• economy and finance