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Royal Bank of Scotland refuses to pass on latest base rate cut

The Royal Bank of Scotland, which is now majority owned by the government, has refused to pass on the full savings of the Bank of England's half percent base rate cut this week. While they have vowed to pass on half of the interest rate reduction to their standard mortgage customers this has caused serious debate within financial circles with HSBC, Lloyds TSB and Nationwide confirming that the full benefit of this week's rate reduction will be passed on to their mortgage customers.

The Royal Bank of Scotland believes it also has an obligation to savers and is suggesting that the partial cost saving afforded to mortgage holders will allow them to give better rates to savers. However, savings rates are now so low that even a 0.25% benefit to savers will have no serious impact upon their income streams. Indeed the national press quoted a £5000 savings account in the UK which was attracting only five pounds interest per year which is a rate of just 0.001%. This perfectly illustrates the difficulties savers in UK are having in their quest to make ends meet.

Yet again it appears that the financial sector has completely ignored the needs and demands of taxpayers, even though their funds have been used to bail out the likes of the Royal Bank of Scotland.

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