Northern Rock, the state-owned lender, has embarrassed the Government by increasing rates on its most competitive deals despite calls for high street lenders to pass on cuts in borrowing costs. This morning, the bank, which was nationalised in February, increased interest rates on its fixed-rate deals by up to 0.3 percentage points, adding up to £40 a month to the cost of monthly interest-only repayments on a £150,000 loan. Its most competitive one-year fixed mortgage has jumped from 3.99 per cent to 4.19 per cent. In the last week, the Government and the Bank of England have warned banks it is vital for the economy that they boost lending and reduce interest rates in line with the falling base rate.
Northern Rock, the state-owned lender, has embarrassed the Government by increasing rates on its most competitive deals despite calls for high street lenders to pass on cuts in borrowing costs.
This morning, the bank, which was nationalised in February, increased interest rates on its fixed-rate deals by up to 0.3 percentage points, adding up to £40 a month to the cost of monthly interest-only repayments on a £150,000 loan.
Its most competitive one-year fixed mortgage has jumped from 3.99 per cent to 4.19 per cent.
In the last week, the Government and the Bank of England have warned banks it is vital for the economy that they boost lending and reduce interest rates in line with the falling base rate.
