Banks react to interest rate cut

Rates have been cut to 1.5%

Three out of the four main NI banks have reacted to the 0.5% cut in interest rates by the Bank of England.

The Northern Bank said that it would match the 0.5% cut on all its base rate and standard variable rate products.

First Trust said it would be changing its base rate, benefitting customers with base rate linked borrowings.

The Ulster Bank also said it will pass on the cut to customers with borrowings linked to the base rate and mortgages linked to the standard variable rate.

However, the bank said it would defer a decision on the savings rates saying that for every mortgage customer it had seven saving customers.

The Northern said customers on a base rate tracker mortgage of £100,000 would get a reduction of £29.21 in their monthly repayments.

First Trust said that 84% of its mortgage customers are on base related products.

The Bank of Ireland has yet to indicate its intentions.

Rates were cut on Thursday to 1.5%, the lowest level in the Bank's 315-year history

Manufacturers' association EEF said the move was "too timid", and that the Bank should have cut rates further.

The Bank has now reduced rates four times from October's 5% level as it continues efforts to help the economy.

The Bank's latest rate reduction comes as the Treasury has denied reports it is planning to inject more money, a policy known as quantitative easing.

A number of newspapers said the step was being considered once interest rates fell close to zero as a tactic to help both stimulate the economy and avoid deflation.

Treasury sources said that while the move had not been ruled out, it was not currently on the agenda.