In an email to brokers, Abbey revealed its existing tracker customers will get the 0.5 per cent cut but not new tracker customers. It has not yet decided whether it will pass the rate cut on to borrowers through the bank’s standard variable rate.
A two-year 75 per cent LTV tracker will remain at 5.89 per cent for new customers and Abbey says this is due to the fact Libor continues to be high.
A spokesman for Abbey says: “This is a reflection that the short term variable funding costs have not reduced.”
Abbey is one of the eight banks that have agreed to improve their capital position by £25bn collectively, but Abbey says it has no plans to use Government funding to recapitalise.
The acquisition of Bradford & Bingley’s deposit base has strengthened the bank’s capital position.