Borrowing costs uncovered

The banks are unlikely to pass ECB rate cuts on to borrowers, writes Emma Kennedy.

11th May, 2013
Credit cards are traditionally one of the most expensive forms of borrowing, with rates in excess of 20 per cent applying in some cases. Photo: Thinkstock

The European Central Bank's (ECB) decision to cut interest rates by 0.25 per cent to a record low of 0.5 per cent resulted in a collective sigh of relief by those with tracker mortgages.

A rate cut means lower mortgage repayments for that category of borrower. However, as banks struggle to rebuild their margins, the ECB rate cut doesn't necessarily mean that all forms of borrowing will become cheaper.

Some banks have stated that they won't pass...

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