Lloyds TSB promises to pass on interest cuts

Lloyds TSB has confirmed it will pass on in full any cuts in the base rate made by the Bank of England tomorrow to existing borrowers on tracker or variable mortgages.

The bank said if a widely-expected reduction in the base rate is made, it would also be passed on by its Cheltenham & Gloucester (C&G) brand.

Any reduction would be passed on by January 1st, 2009.

Lenders – particularly those who have accepted help from the government – have been under pressure to pass on the reductions in the base rate to their mortgage customers.

The Bank of England is expected to cut the interest rate tomorrow, with some calling for a 1.5 per cent cut, which would take the base rate to 1.5 per cent.

The base rate has never dipped below two per cent in the Bank of England's history but the threat of a serious recession has put the Bank under pressure to take action.