British Banks Raise Rates

Here’s the view from London:

Northern Rock, the Government-owned lender, has announced that it is pulling all its tracker deals for homeowners and landlords and is expected to increase rates when it relaunches the mortgages later this week.

It follows a move by Abbey earlier today to increase interest rates on tracker deals by up to 0.5 percentage points.

Tracker deals are pegged to the Bank of England base rate. The bank, owned by Spain’s Santander, has effectively reduced or cancelled out the Bank of England’s expected rate cut tomorrow, designed to alleviate the pressure on over-burdoned homeowers.

Experts say that lenders are likely to continue to protect profits margins at the expense of homeowners.

Aaron Strutt, of Chase de Vere Mortgage Management, a broker, said: “All the big lenders are expected to change trackers in the next few days. The margins between new tracker rates and the base rate are going to continue to increase.”

Northern Rock said it would review its tracker deals after the base rate announcement at midday tomorrow by the Bank of England’s Monetary Policy Committee (MPC).

Chelthenham & Gloucester, owned by Lloyds TSB, is also rumoured to be looking at its tracker deals and other lenders are expected to follow suit

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (, he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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