The Building Societies Association warns that last week’s 0.25% base rate cut may not be passed onto borrowers immediately.
Adrian Coles, director-general of the BSA, says the cut will be good news for first-time buyers and borrowers coming off fixed rate deals.
But he adds: “The Monetary Policy Committee’s decision may not be reflected in changes to LIBOR rates.
“As a result the reduction may not immediately be seen in the products on offer.” Stuart Law, chief executive of Assetz, says: “I don’t think the base rate cut was big enough. A significant reduction of 0.5% was needed to have any impact on the market.”
Brian Murphy, head of lending at Mortgage Advice Bureau, says the cut was a necessary response to worries about economic growth.