AIB HAS ANNOUNCED this evening that it will cut the rate applied to variable rates mortgages by 0.25 per cent.
In a statement, the bank said it had made the decision to implement the interest rate cut “following the meeting between AIB, members of the Government and the Economic Management Council”.
It is a turnaround from yesterday, when Executive Chairman of AIB David Hodgkinson told the Taoiseach and Finance Minister that the bank would not pass on an interest rate cut by the European Central Bank to its customers. AIB defended its decision, saying that it had not “passed on the past two rate increases” by the ECB and, similarly, would not be passing on the cut.
However, the Government reacted angrily to the bank’s stance on the issue, with Tánaiste Eamon Gilmore saying today that it was “the intention of the Government that the interest rate reduction should be passed on,” – and adding that the Government might take action against AIB if it refused to comply.
Members of the public also expressed their anger over AIB’s original position yesterday, particularly following the revelation that the – effectively-nationalised – bank was continuing hire new staff, promote existing workers and raise salaries.
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