In an unexpected move the European Central Bank (ECB) has reduced the interest rate last week from 1.5% down to 1.25%. (www.independent.ie/business/european/boost-for-mortgage-holders-as-ecb-cuts-interest-rates-2925263.html)
Since most banks in Ireland are now owned by the state, the Taoiseach Enda Kenny has warned the banks that laws could be introduced that would force the banks to pass on interest rate cuts if they don’t do that now. (www.independent.ie/national-news/pass-on-ecb-interest-rate-cut-kenny-warns-banks-2926680.html)
And what did most banks? They ignored the warning! I guess this “game” Bank vs Government resulted in a 1:0.
The AIB and the NIB have declared that they will not pass on the rate cuts, the ESB will pass them on and the Bank of Ireland has not made a statement yet, but there are expectations that they won’t pass on the cuts either. (www.rte.ie/news/2011/1109/mortgage-business.html)
