Pass on rate cuts, MPs tell banks

Lord Mandelson urged banks to cut interest rates while visiting the Gulf

The Bank of England's monetary policy committee has been urged by a group of more than 20 MPs to cut interest rates when it meets on Thursday.

They have also tabled a motion in parliament urging all UK banks to pass on benefits to customers.

The MPs, led by Labour's Jim Sheridan, said the benefits of previous cuts had still not been passed on to consumers.

They acted after Business Secretary Lord Mandelson said the public would be "surprised" if no action were taken.

The motion stresses that cutting rates would assist the economy and all banks and financial institutions should try to "help ordinary people cope".

Mr Sheridan, the MP for Paisley and Renfrewshire North, told the BBC: "I think the government and the businesses should do everything they can to fix the economy.

"If the interest rates fall, this should be passed on to the customers. It is not an over-ambitious request and we expect even more colleagues to sign.

"MPs from all of the parties have heard from constituents who need help during this difficult period."

'Not unreasonable'

Lord Mandelson, while on a visit to the Gulf with the prime minister, also said small small businesses and mortgage-holders should benefit if The Bank of England does cut rates by at least 0.5%, as it is expected to.

He acknowledged that the government could not force the high street banks to cut rates.

"When official rates are being cut, it is not unreasonable for customers to see some benefit from that," he told the BBC's Today programme.

When the government bailed out some High Street banks, including the Royal Bank of Scotland, Lloyds TSB and HBOS, by taking a