05/12/2008 - Brown urges banks to reduce rates
Banks are facing increased pressure from the Government to pass on the latest interest-rate cut to borrowers.
Prime Minister Gordon Brown told GMTV: "I think banks should really pass on the interest rate cut. We are talking to the banks. Remember last time there was a cut, we had to speak to them before it was passed on and we will be speaking to them again."
Only a handful of lenders have said they will pass on Thursday's 1% reduction in full. Mr Brown added that it was important to tackle the problem of the high Libor rate - the rate banks charge when borrowing from each other.
He denied that savers were being left in the lurch by the drastic rate cut, saying: "What I would be worried about most is if we had inflation going up and taking away the value of people's savings. The interest rate going down is necessary to get the economy moving again. If you are a saver the best protection you have is that inflation is kept low."
He said that the gloomy economic headlines would only improve, "when we have the level of international co-operation we need", adding he will be pressing for action from other countries on Monday.
Copyright © Press Association 2008
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