There appears to be a complete lack of understanding of how banks raise finance in the media.

The bank of England rate is for banks borrowing overnight - it is not reflective of fixed borrowing over any considerable term. Therefore its not practical for the banks to reflect this rate en masse. The actual cost of longer term borrowing (via interest paid to us in deposit accounts or on the wholesale market) is much higher and doesn’t track to the Bank of England rate.

So is it realistic that we expect banks to reduce prices, when their cost of borrowing in real terms is almost unchanged?

The importance of this via media and government spin also intrigues me. The calls for changes to variable standard rate mortgages account for only 10% of the market - so it’s hardly going to change the world.

Smala01