Past Articles for the Creditor Behaviour Category

Banks have been urged to pass on lower prices to borrowers in light of recent reductions in rates.

Lenders must provide some debt help to customers after the recent Bank of England base rate cut and a fall in the London Interbank Offered Rate (Libor), Darren Cook from Moneyfacts has claimed.

The Libor figure - the interest rate at which City banks lend to each other - dropped this week, prompting Mr Cook to call for lenders to ease the pressure on homeowners.

He remarked: “The cost of finance to the banks looks like it is becoming cheaper now … they need to pass that onto the consumer.”

So far, some lenders have been unable to pass on the Bank of England’s cut to borrowers due to difficult market conditions, he explained.

But the fall in the Libor rate should help to alleviate the problem, Mr Cook concluded.

On October 20th, this figure dropped from 6.16 per cent to 6.11635 per cent, according to the British Bankers Association.

By Jamie Price

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A consumer body has called upon energy suppliers to cut prices in light of falling oil costs.

Consumer Focus has challenged firms to make the move after official figures showed that gas and electricity prices are driving up inflation.

Chief executive Ed Mayo demanded “immediate action” from energy organisations and regulator Ofgem in order to offer fuel debt help to struggling households.

“Oil prices have been falling since July, yet consumers have seen unprecedented rises in their gas and electricity costs. Consumers must now be wondering why they are left waiting,” he remarked.

He added that this would be good for consumers and the economy as a whole.

Figures from the Office for National Statistics showed that electricity prices rose to 30.3 per cent in September, up from 18 per cent in August.

In addition, gas rose from 27.7 per cent to 49.9 per cent over the same period.

Rising expense for clothing, footwear and recreation also contributed to the upward effect on inflation.

By Jamie Price

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A high street building society has offered customers some debt help by announcing that its mortgage rates are to be reduced.

Nationwide has revealed that its base mortgage rate (BMR) will be cut by 0.3 per cent, down to 6.19 per cent.

The reduction, which will come into force on November 1st, makes it the lowest BMR on the high street, the firm stated.

Furthermore, its existing tracker mortgage rates will be slashed by 0.5 per cent in order to reflect the Bank of England’s change in the central rate.

The company claimed that the lowering of rates on its homeowner loans strengthens its reputation for prudent lending.

Commenting on the announcement, spokesperson Matthew Carter said: “Nationwide is committed to providing fair, affordable and sustainable mortgages.”

Meanwhile, the Co-operative Bank has also acted on the national base rate cut, by reducing rates by 0.5 per cent on standard variable products.

By Jamie Price

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Concerns have been raised that millions of low-income households face the misery of fuel debt as official inflation figures were released.

Gas inflation rose to 49.9 per cent in September - up from 27.7 per cent in August - while electricity prices increased 22.3 per cent over the same period.

Charity Age Concern claimed that pensioners will struggle to keep warm this winter as a result and called on the government to introduce emergency measures to combat the issue.

“With the cost of living sky-rocketing, the government should be taking the real rate of inflation for pensioners into account,” remarked director general George Lishman.

He added that spiralling food and fuel prices hit pensioners harder than other age groups.

The latest figures from the Office of National Statistics showed that consumer prices index annual inflation rose to 5.2 per cent in September after further increases in gas and electricity bills.

By Jamie Price

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A new campaign is being launched by Apacs, the UK payments association, in order to raise awareness about online fraud.

As Christmas - a time when many rely on credit cards or internet shopping - approaches, the body is highlighting the issue with the support of banks, retailers and firms such as Visa and MasterCard.

It will commence on October 20th, when adverts will appear in the regional and national press.

Director of communications Sandra Quinn said that people must be proactive if they wish to avoid becoming a victim.

“As more and more of us are shopping online with our cards, we all need to take an active role in protecting our personal information - working together to combat the fraudsters.”

The cost of Christmas is a major factor for credit card debt - several retailers have increased rates on their store cards in the run up to the festive season, according to Moneyfacts.

By Jamie Price

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The Treasury has released details of a debt help package being made available to UK banks in order to support them through the turmoil in the financial markets.

It is making capital investments in Royal Bank of Scotland and will also invest into Lloyds TSB and HBOS after their merger is completed.

A total of £37 billion will be supplied to these organisations in order to boost confidence and kick-start the mortgage market.

By doing this, the Treasury hopes to “help stabilise their position and support the long term strength of the economy,” it stated.

The government has decided to take action in order to protect savers, businesses and borrowers and to “safeguard the interests” of taxpayers.

It comes after the Bank of England lowered interest rates in a coordinated move with several central banks from around the world.

Meanwhile, it has emerged that several British councils have millions invested in Icelandic banks that have collapsed, leading to fears that council tax will have to rise.

By Jamie Price

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Although the Bank of England’s decision to lower interest rates to 4.5 per cent will help flagging financial markets, more action is needed to stave off a recession, it has been claimed.

Simon Rubinsohn, chief economist for the Royal Institution of Chartered Surveyors (Rics), said that the response from the Bank to the economic crisis was “appropriate”, but predicted that bad times are still ahead.

“At least two quarters of negative growth are likely and unemployment could climb from 1.7 to more than two million,” he claimed.

He added that house prices are expected to fall further still, although homeowners will be aided by lower borrowing costs.

Meanwhile, the spotlight now falls onto lenders to see how quickly they will respond to the move and lower rates in order to help customers with their debt management, it has been argued.

It is hoped that the full cut will be passed on “swiftly” to borrowers, according to Ben Thompson, the mortgages director for Legal & General.

By Jamie Price

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The new measures announced today by the Treasury and the Bank of England “could not have come soon enough”, it has been claimed.

James Caldwell from the Fair Investment Company has hailed the package of support unveiled by chancellor Alistair Darling and the 0.5 per cent interest cut announced by the Bank’s monetary policy committee.

The banking system in the UK was “at breaking point”, he claimed, and added that the action taken by officials is a positive step.

It could offer beleaguered borrowers some debt help as confidence within the industry should be buoyed by the support, he argued.

“With an extra £200 billion available in the short term, on top of the £50 billion aimed at shoring up UK banks’ capital, lending between banks should free up,” Mr Caldwell commented.

However, it remains to be seen whether this happens in practice, he warned.

Meanwhile the Association of Mortgage Intermediaries also welcomed the “long-awaited” moves.

By Jamie Price

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Interest rates have been slashed by 0.5 per cent a day earlier than anticipated after a special meeting was held a by the Bank of England’s monetary policy committee (MPC).

It is part of a coordinated plan of action along with several foreign banks after financial markets “deteriorated very markedly”, the MPC stated.

The Bank worked in conjunction with the European Central Bank, US Federal Reserve, Bank of Canada, Swiss National Bank, Bank of Japan and Sveriges Riksbank to formulate the plan.

A reduction in rates was decided upon by the MPC after the supply of credit in the UK was seen to be “clearly tightening further as banks seek to adjust their balance sheets”.

However, it asserted, an interest rate cut alone is not enough to resolve the issues in the finance sector.

So the committee welcomed the government’s newly-announced programme to supply extra capital to domestic banks.

It is hoped that the extra £200 billion of liquidity being injected will provide debt help for banks across the country.

By Jamie Price

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The Council of Mortgage Lenders (CML) has announced that it considers conditions in the financial sector to have “deteriorated sharply” over the past fortnight.

It has called on the Bank of England to act on the country’s debt worries and acknowledge that concerns about economic downturn now outweigh that of inflation.

Restricted funding continues to affect the number of mortgages available, it added.

However, it has reiterated its statement that reports of the “death” of the buy-to-let mortgages sector have been exaggerated and that the industry is still coping after the near bankruptcy and subsequent bailout of Bradford & Bingley.

It comes as the CML released the latest issue of its News & Views publication, dealing with the recent happenings within the “fast-moving and febrile environment”.

Action must be taken to improve confidence in the mortgage funding market, it urged.

A lack of finance may make it increasingly difficult for ‘funts’ - people that are financially untouchable - to gain credit.

By Jamie Price

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