Providers may widen margins at customers' expense Defaqto's David Black comments on base rate change

Edited by the Insidemoneytalk editorial team Feb 11, 2008

Following The Monetary Policy Committee's decision to reduce the Bank of England Base rate by 0.25% to 5.25%, Defaqto's Principal Consultant - Banking, David Black comments:

"This 0.25% cut by the Monetary Policy Committee was widely anticipated and comes as no surprise.

I will watch with interest to see whether the full cut is passed on to both savers and borrowers but I suspect that some providers may use the opportunity to widen their margins at customers' expense.

"Prior to this cut the average Standard Variable Rate is currently 7.55%.

Last time the bank base rate was at 5.25% (between 11th January and 9th May 2007) the average Standard Variable Rate was 7.05%.".