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Mutuals steal the march over plc rivals


Mutuals are stealing a march over their plc rivals by refusing to pass to borrowers the Bank of England 0.25 per cent base rate increase.


The Bank of England surprised lenders this week by increasing the base rate to 5.25 per cent from 5 per cent but so far only plc&#39s have followed suit and hiked their standard variable rates.


Nationwide and Leeds & Holbeck building societies are freezing their standard variable rates at 6.45 per cent and 6.79 per cent respectively, while Halifax has immediately hit its borrowers pockets by upping its rates by 0.14 per cent to 6.99 per cent, and Virgin has increased its rates by 0.25 per cent to 6.45 per cent.


Abbey National, Alliance & Leicester, Woolwich and plc in the making, Bradford & Bingley, are all reviewing their rates.


But the stance taken by the two mutuals has prompted an angry attack by Virgin press officer Gordon Maw. He says: &#34The companies that have been gloating and saying they are holding rates are the companies that have not passed on the last few rate cuts.&#34


Nationwide press officer Mark Hamilton says: &#34Its another example that we are not profit driven the same way banks are and are able to offer the consumer better value for money.


&#34The fact remains that at 6.45 per cent we are well below the rates being offered by the high street banks.&#34

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Portman Building Society – 3 Year Fixed Interest Bond (inserted 17/9/99)

Type: Three Year Fixed Interest BondMinimum-maximum investment: £500-£50,000 (individual) / £100,000 (joint)Interest rates: 6.50% gross pa / AER for a min investment of £500 (£1,000 for postal applications.Term: 3 yearsOffer period: Until further noticeWithdrawal penalties: N/ATel: 0800 807080

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