Good work and fair tidings to Abbey which has been the first to react to the Bank of England’s £50bn swap offer. Although Abbey’s move to cut its two-year tracker and flexible mortgage by a mere 0.1% may not seem much, in the current market it does offer a glimmer of hope.
The hope is that in due course, LIBOR will fall, which will enable lenders to gain confidence to lend again.
It will be interesting to see whether this snowballs and other lenders follow suit, but to quote a famous phrase, slowly slowly catchy monkey.
So now the chancellor is off to see if he can persuade lenders to tread softly and be sensitive when dealing with clients who begin to have problems as they come off lower rates and move onto higher ones. This is all part of treating customers fairly but it does seem to be a sensible thing to reiterate this.
Also, it is nice to see the government’s own bank doing something. Northern Rock, in a rapid response to base rate cuts 11 days ago, finally cut its own variable rate by 0.1%. This time the phrase “do as I say not as I do” comes to mind.