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First lender responds to rate hike

Nationwide has already responded to yesterday's move by the Bank of England to increase interest rates, suggesting other major lenders will soon follow suit.

Following the bank's announcement that the base rate will rise to 5.25 per cent, Nationwide confirmed that from February 1st it will add a quarter of a percentage point on rates for savings and mortages.

This will see its base rate variable mortgage rise to 6.74 per cent and tracker and variable savings rates will also increase inline with the bank's quarter point rise.

Nationwide executive director Stuart Bernau said: "The changes we are making to our mortgage and savings rates are relatively straightforward and simple.

"We are pleased to be able to act quickly to make it clear to our members how they are going to be affected following the increase in the Bank of England base rate."

It is now widely expected that other lenders will take Nationwide's lead and announce how they intend to pass on the rate hike to customers.

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12/01/2007 15:31:33

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