Govt encourages lenders to pass on rate cut

Date: 7th November 2008

The government has called on the banking sector to pass on yesterday's (November 6th) base rate cut to business start-ups.

Following the monetary policy committee's decision to slash the lending rate by 1.5 per cent to three per cent, its lowest level since 1955, chancellor Alistair Darling has urged lenders to pass on the favour to small firms.

According to the Independent newspaper, backbenchers are fretting a voter backlash should businesses and individuals not feel the benefits of the reduction.

Mr Darling said: "I believe that it is imperative that banks realise they have got to play their part in helping businesses and helping people.

"Banks have to decide on an individual case, the terms and conditions on which they lend … government can't decide that."

Business start-ups which are unsure of how the new lending rate will affect their enterprise, should consider speaking to an accountant.