Banks told to stop ripping off customers

Lenders continued to sit on their hands, with only five groups so far announcing plans to pass on the interest-rate cut to their variable-rate borrowers.

Among those who have so far failed to say if they will be reducing their standard variable rate (SVR) are nationalised banks Northern Rock and Bradford & Bingley and Royal Bank of Scotland, in which the government holds a majority stake.

HSBC, Lloyds TSB, Nationwide and Skipton Building Society are the only lenders to announce that they will be passing on the full 0.5 per cent reduction, with Britain's biggest mortgage lender Halifax reducing its SVR by 0.25 per cent.

But Lloyds TSB, which also lends under the Cheltenham & Gloucester brand, Nationwide and Skipton had little choice but to cut by the full amount after pledging that their SVR would never be more than a set percentage above the Bank of England base rate.

A similar clause also meant that Halifax had to reduce its variable rate by at least 0.25 per cent.

But the majority of lenders are not expected to pass on the full 0.5 per cent reduction, which slashed the base rate to a record low of 1.5 per cent, with most thought likely to cut their SVR by 0.25 per cent or nothing at all.

Labour MP Jeremy Corbyn said that it was now time for these lenders to stop sitting on their hands and start passing on the cut.

"Billions of pounds of public money was given to them and it's time for them to stop thinking about personal perks and shareholders," he said.

Communist Party of Britain general secretary Robert Griffiths said: "We don't just need a change of ownership but a change of policy so publicly owned backs operate in the interest of the public.

"A clear-out of senior management is necessary across all sectors of the banking industry to replace those primarily interested in short-term profit, speculation and screwing their customers with senior managers who better understand the needs of ordinary people, small business and the productive economy."