Lenders warned homeowners last night that they should not expect cheaper mortgage repayments even if the Bank of England cuts interest rates today, according to The Times .
The Council of Mortgage Lenders (CML), the main lobby group representing banks and building societies, said that its members would not automatically pass a base rate reduction on to customers in the form of cheaper loans.
That would appear to put it on a collision course with the Government.
Alistair Darling has said that banks receiving £37 billion of government funds should maintain lending at 2007 levels.
However, the CML effectively gave the green light to its members to disregard the Chancellor's request, saying that it did not make commercial sense to insist or expect that lenders automatically would pass on cuts in Bank rate to borrowers.
Lloyds TSB executives have yet to disclose whether they intend to use their own money to back the fundraising the bank is undertaking as part of its rescue takeover of HBOS and to meet the government's demand to bolster its balance sheet, says the Guardian.
The circular to shareholders issued by Lloyds this week appears to indicate that the chief executive, Eric Daniels, and other members of the bank's board are not stumping up their cash to back the fundraising.
It is unusual for the directors of companies that are asking their investors to buy new shares not to pledge to use their own cash. Directors usually support cash calls to demonstrate their confidence in the business.
Lloyds and HBOS are jointly raising £17bn of new funds under the government bail-out scheme, while Royal Bank of Scotland is raising £20bn.
Old Mutual finance director Jonathan Nicholls has quit the London-quoted insurer to pursue interests outside the life insurance sector, reports the Telegraph.
His resignation comes less than two months after the company’s former chief executive, Jim Sutcliffe, stepped down after eight years at the helm.
Mr Nicholls has been finance director since 2006. He will be replaced by Philip Broadley, a former financial director at life assurer Prudential.
The company has been hard by hit the financial crisis, which has forced it to inject cash into its US Life unit and seen its shares slide on investor fears that the turmoil is infecting the insurance sector.
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