Darling and UK Banks Going Head to Head

Alistair Darling has been seeking a resolution with UK banks regarding the housing market. Darling has been pressing the banks to lower their interest rates in order to pass on the Bank of England interest rate cuts to borrowers.

Darling will meet with the representatives from the Council of Mortgage Lenders. This group consists of 157 lenders. They are set up to meet on Monday April 22. During this meeting Darling is going to push for a resolution regarding the current mortgage rates being offered to consumers. The Bank of England has cut the base rate three quarters of a percent since the beginning of 2008. They have also bailed out several banks and building societies with 50 billion pounds by sending it into the money markets. Despite the effort of the Bank of England the more popular mortgage items rose again to an eight year high.

Darling in an interview in China said that the UK needs to make sure the individuals with mortgages are seeing the benefits as quickly as possible. Gordon Brown has also been talking about the mortgage industry. At a breakfast with executives talk about the credit crunch affecting the residents of the UK happened. It seems the credit crunch is having an adverse affect on the Labour government as they are seen as not fixing the problem. HBOS is one of the largest mortgage companies in the UK. They have raised their rates by a half a point due to high funding costs according to their news release.

Darling is expected to be in Washington after his trip to China. He will be meeting with several finance ministers while in Washington. He also has made some business ties in China that should help both economies. China has one of the fastest growing economies at the moment.

In other areas of concern is the housing slump. Gordon Brown has been trying to deal with the political fallout related to the US subprime market. Part of the issue with the US subprime market is that it affected the entire globe and especially Northern Rock. The fall of Northern Rock spurred a UK crisis in which the property market saw a huge decline in sales. This is the worst the housing market has been since 1978 according to the Royal Institution of Chartered Surveyors.

The Labour government has had a drop of 28 percent support in a recent poll, making Brown look like the problem. The conservatives have a 44 percent support, which is the most they have had since 1992. The financial sector and banks have a tough road ahead and there needs to be some changes to help the consumer benefit, according to Darling.

With the different affects of the housing slump and credit crisis in the US the UK is beginning to see an increase in the interest rates. The London Interbank was a three month rate offered for pounds. The rate banks have to pay to borrow from each other. This rate as of April was 5.92 percent. This is .92 basis points above the base rate from the Bank of England. With the rate banks paying 5.92 percent this means the consumer is going to pay even more than that. This .92 percent the rate banks are paying is .34 percent or 34 basis points above what they paid last year at this time.

Brown has a meeting with Wall Street bankers to get their perspective on the situation. Brown is trying to determine how to get more liquidity in the market so that homeowners are able to benefit.

The Council of Mortgage Lenders has also discussed the situation and believes a tightening of the UK mortgage products may be the way to go. They believe that the market can be reversed if the Bank of England places more liquidity in the market and if the treasury is willing to support the homeowners with their mortgage payments. Darling at this time is not willing to rule out other options regarding the current block on the mortgage market. He may decide that the mortgage companies need to release some of the products they have removed from the market in order to buoy the financial market.

Back To Financial News April 2008
Travel Rewards With Your Credit Card
APS and Prepaid Gold MasterCard
The Figures On Credit Card Balance Transfers
Pointers for Balance Transfers
Credit Card Interest
Credit Offers Limited
Executive’s Life Ruined by ID Theft
Getting Around Life’s Obstacles
How To Borrow A Grand
Paying for a Good Credit Rating
UK Debt and the Mortgage Industry
Abuse of Government Credit Cards
Asian Growth Helps UK
Banks Raising Funds Offers Hope
Darling and UK Banks Going Head to Head
Estate Agents and Card Fraud
Government to Help UK Banks
Insuring UK Gardens
Interest Rates Rising with Underhanded Techniques
Lost Luggage Insurance Removed
Overdraft Charges Increase Credit Card Balances
Prediction: 10 Percent Drop in Insurance Market
Rise in the Housing Market Prices
The Scams With Telephone Calls and Security Codes
UK Insurance Costs Rising