HSBC passes on BoE base rate cut to customers

After the Bank of England lowered the base rate to 0.25% from 0.50%, HSBC said on Friday it will pass on the rate cut to its tracker and variable mortgage rate customers.

Tracker mortgage customers will have their rates fall to 0.25% from 0.50% and standard variable rate mortgage customers will have their rate decrease to 3.69% from 3.94%.

On Thursday, the central bank cut interest rates for the first time in seven years to 0.25%, a record low, and drew up a £70bn bond buying programme to stimulate the wilting British economy in light of the Brexit vote.

Mark Carney, the Governor of the Bank of England, said there was “no excuse” for high street banks not to pass the rate cut to customers.

HSBC said in a statement: "Following the base rate announcement yesterday we have passed on the full reduction to customers with tracker mortgages today. We will also be passing on the reduction to mortgage customers on our standard variable rate, which is already one of the lowest in the market and will reduce from 3.94% to 3.69% with effect from 1 September."

Europe's largest bank followed Santander and Barclays who said on Friday, immediately after BoE’s announcement, they would cut their standard variable rate mortgages.

Shares in HSBC Holdings were up 1.1% to 523.90p at 1252 BST.