The consumer press had cooked up a storm after it seemed that the evil banks would not ‘pass on’ the whopping rate cut into their SVRs, their flexible and their tracker mortgages.
“NOW PASS IT ON, YOU BANKERS” said The Sun, “SHAME OF THE BANKS” cried the Daily Mail and “INTEREST RATS” bellowed the Mirror. The nation was disgusted as bank managers up and down the country did morning laps in their money pools a la Scrooge McDuck.
So Gordon Brown was worried this morning: an angry voter in 2008 is a Tory voter in 2009, so he quickly blew his horn and the bank bosses came into his office like a gang of naughty school boys who had been caught with a packet of stink bombs in the boys toilets. They were told in no uncertain terms to do what they were told, to straighten their ties and tuck in their shirts.
And then as if by magic the rate was passed on.
Brown said this afternoon: “We are determined that the interest rate cuts are passed through, we’re also determined that lending resumes.”
Strong words from Brown, but what can his Government actually do? Can Brown push down Libor to 3 per cent? Can Brown make more homes appear? Can Brown make advisers source mortgages that don’t exist?
No. The UK mortgage industry is a consumer and market driven monster that cannot be controlled by one man.
But will this stop a Prime Minister desperate for kudos? A situation has emerged where a group of mortgage lenders cannot do and do not want to do what the Government needs them to do.
So where will the ordering stop? Will the boys be called back to the headmaster’s office next week when they reveal 6 per cent trackers? And then what happens when these amazing sensible first-time buyer mortgages do not appear by Christmas? What then?
Although many IFAs would love the thought of the bank bosses touching their toes and getting six of the best from Mr Brown every week, is that really a good thing?
Can the mortgage market ever recuperate and heal if it is being used as a political stick of dynamite?