One in five banks has failed to pass on the cut in interest rates to mortgage borrowers after the Bank of England’s reduction of the base rate last month.

About 18 of 103 mortgage lenders, including Intelligent Finance, Newcastle Building Society and Skipton Building Society, have not reduced their standard variable rates, and 16, including Alliance & Leicester, Egg and Northern Rock, have cut rates by less than 0.25 per cent, according to moneysupermarket.com, the price comparison website.

The findings will add pressure to the Bank of England to announce a further rate cut when its Monetary Policy Committee (MPC) meets on Thursday. However, experts said that borrowers can expect further disappointment even if the MPC decides to cut rates again, because banks could use a reduction to boost profit margins instead of passing it on to customers.

Many banks have been punishing savers with bigger reductions on savings rates after the base-rate cut. Alliance & Leicester, Nationwide and HSBC are among those institutions to have reduced interest on some savings accounts by more than 0.25 percentage points.

Alliance & Leicester, which reduced mortgage rates by 0.2 per cent, cut saving rates by up to 0.5 per cent at the beginning of January. HSBC made cuts of up to 0.49 per cent. Despite reducing mortgage rates by the full 0.25 per cent, Nationwide cut returns to savers by 0.3 per cent.

Lisa Taylor, of Moneyfacts.co.uk, said: “It is disappointing that some of the largest savings cuts have been made by some of the largest providers. A cut to savings rate of more than 0.25 percentage points is unacceptable.”

David Hollingworth, of London & Country, a mortgage broker, said: “The big expectation in December was that banks would not pass on the rate cut to borrowers at all because they are trying to protect their profits. This time around, most did, although there were a few exceptions. But borrowers should not necessarily get their hopes up for the next cut.”

Halifax and Nationwide, Britain’s biggest mortgage lenders, passed on the 0.25 per cent cut in full. Skipton Building Society said that although it had not made a cut, its 7.14 per cent standard rate was still “competitive”. Skipton has not cut savings rates.

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