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Gilmore urges other banks to follow AIB with rate cut

The Tánaiste has called on Bank of Ireland and Ulster Bank to also pass on the ECB rate reduction to mortgage customers.

Eamon Gilmore has called on lenders to follow AIB with a rate cut
Eamon Gilmore has called on lenders to follow AIB with a rate cut
Image: Sasko Lazarov/Photocall Ireland

TÁNAISTE EAMON GILMORE has urged Bank of Ireland and Ulster Bank to follow AIB in passing on a recent ECB interest rate cut to variable mortgage customers.

Gilmore said it was the “strong wish” of the government that the reduction should be passed on, and called on the two lenders to “respond positively”.

In a U-turn, AIB last night announced that it would reduce interest on variable rate mortgages by 0.25 per cent after a meeting with the Government on Wednesday. The lender had earlier insisted that there would be no reduction, as it had not passed on an ECB rate increase earlier this year.

Speaking on RTÉ’s Morning Ireland, Gilmore welcomed the AIB move, and said he hoped Bank of Ireland and Ulster Bank would follow. “I now hope that both Ulster Bank and Bank of Ireland will respond positively as well,” he said.

“It is the government’s strong wish that the reduction should be passed on to the customers.”

However, Ulster Bank told TheJournal.ie this morning that their position was unchanged. The bank have said their mortgage rates are under constant review, and relate solely to the cost of funding.

Gilmore also said that the Government would be looking at measures to avoid similar confrontations with the banks in future. “We don’t want a situation where every time the ECB announces interest rates there is a stand-off,” he said.

Meanwhile, minister for Education Ruairí Quinn has rejected the suggestion that the Government was “naive” in approaching its meeting with the banks on Wednesday.

“No it wasn’t naive, it was what was required,” he said on RTÉ’s Prime Time. “We’ve seen what the result was so far with AIB, and we’ve yet to see what the banks will now do.”

Read more: AIB announces interest cut to variable rate mortgages>

Read more: Government may ‘take action’ against banks not passing on mortgage rate cut>

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Michael Freeman

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