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Thursday 9th October 2008
Large mortgage lenders are to pass on the Bank of England's interest rate reduction.
Yesterday, the central bank announced that it was lowering the base rate by 0.5 per cent, with the European Central Bank and US Federal Reserve doing the same.
This was a concerted action aimed at tackling the worst effects of the credit crunch, which has worsened over the last few days and threatens to push down house prices and limit loans availability still further.
Lloyds TSB and Halifax are among the lenders passing on the 0.5 per cent cut on their standard variable rates (SVR).
Earlier yesterday, chancellor of the exchequer Alistair Darling announced that the government would be buying up around £50 billion of shares in banks.
It is hoped by ministers that this will lessen insolvency risks and encourage inter-bank lending.
Michael Coogan, director general of the Council of Mortgage Lenders, commented:"The package of bank funding and capital measures is further strengthened by this rate cut.
"All this decisive action augurs well for an improving market situation looking ahead, even though no-one is pretending the tough times are over yet."
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