AIB cut may be a Pyrrhic victory

While it may seem like a win for people power, some analysts believe that the AIB mortgage rate reduction could backfire and eventually cost taxpayers more, writes Jon Ihle, Markets Correspondent.

13th November, 2011
Richie Boucher, chief executive of Bank of Ireland (right), following the meeting with Taoiseach Enda Kenny about withholding mortgage interest rate reductions. Photo: Collins

When AIB released a terse statement last Thursday evening announcing that it was going to implement a 0.25 per cent cut on its variable rate mortgages after meeting members of the government and the economic management council, it looked like a clear victory for the government and the hard-pressed debtors among the electorate.

After seeming to reach agreement with the Taoiseach and Minister for Finance Michael Noonan the day before that it would not pass on...

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