AN MP has said she will want talks with Nationwide if it follows through with threats not to pass on interest rate cuts to borrowers.
Nationwide released a statement yesterday saying that if interests rates were reduced by the Bank of England to below two per cent it will invoke a clause in contracts of tracker mortgage customers enabling it to stop reducing the rate.
But Anne Snelgrove, MP for South Swindon, said it was vital that the firm passed on any saving to customers.
“Should there be a further cut in interest rates I will be talking to Nationwide about what it can do to pass on the cut to customers,” she said. “I was very pleased that Nationwide did follow the Bank of England when it reduced the base rate to two per cent last month.
“It is important that lenders pass on interest rate cuts – we need to do whatever it takes to help businesses, people, and the wider economy in Swindon.
“Many people in Swindon will remember when on Black Wednesday the Conservative Chancellor, advised by David Cameron at the time, put up interest rates from 10 per cent to 12 per cent on Black Wednesday – we must not deal with a financial downturn in that way.”
However, the bank said it is doing as much as it can to support its 1.4m borrowers and its 10m savers.
A spokesman said that because of a clause in tracker mortgage contracts it could have chosen not to pass on last month’s one per cent interest rate cut.
But it waived the clause at that point, passing on the full cut.
A bank spokesman said: “Clearly we are always happy to talk to Anne about the way we are running our business, but we have to act in the interest of our members as a whole and that includes savers.
“We are doing the best we can to support our customers.
“We have already done an extraordinary amount to support our borrowers.
“But we also have to be concerned with what is happening to savers rates.”
He added that the bank currently has 200,000 customers on tracker mortgages.
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