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Mortgage rate rip-off as banks slow to react

It has come to the attention of regulator that some mortgage holders in the UK are being charged three times the Bank of England base rate which is tantamount to abusing the system. While Barclays bank appeared to have been overgenerous today with a 1.5% reduction in its mortgage rate, the bank failed to mention that they had yet to pass on the 1.5% base rate cut announced just a few weeks ago.

While the Financial Services Authority has been fairly quiet of late, there are suggestions that behind the scenes a number of initiatives will be announced in due course. The Gordon Brown suggestion that banks will be fined for "mistreating" their customers seems to be one subject which is very high on the agenda and set to hit home in the short term. Gordon Brown has effectively put his political future on the line as he battles to force the financial services industry to reduce costs as interest rates continue to fall.

The last few weeks have seen a number of anomalies hit the UK market with collars on mortgage tracker funds, banks slow to pass on interest-rate reductions and savers being hammered as interest rates move down yet again.

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