Friday evening business bulletin

Market awaits impact of interest rate cut; Three lenders announce mortgage rate reduction; Housebuilder awaits return of the "feel-good factor".

Updates from the banking and retail sectors will provide a glimpse next week into trading conditions prior to the Bank of England’s interest rate cut.

High street banks Lloyds TSB and Halifax Bank of Scotland will be greeted by a far less anxious market when they update on trading, as the last of the "big five" to give third quarter reviews.

Rivals Barclays and Royal Bank of Scotland have already calmed nerves with news of losses from the crisis-hit US sub-prime mortgage market that were less than speculated.

Three lenders today announced they were reducing their mortgage rates following yesterday’s interest rate cut, but the majority continued to sit on their hands.

The Co-operative Bank and First Active both said they would be passing on yesterday’s 0.25% reduction in the Bank of England base rate in full.

Internet lender Egg became the first group not to pass on the whole reduction, saying it was cutting its new borrower rate and existing borrower rate by just 0.15% to 6.79%.

Housebuilder Berkeley said the "feel-good factor" could return to the housing market after Thursday’s quarter point cut in interest rates by the Bank of England. The group’s comments came as it reported pre-tax profits up 11% at £90.6 million for the six months to the end of October.

The pound at 4:30pm was US$2.0274 compared to US$2.0299 at the previous close while the euro at 4:30pm was £0.7224 compared to £0.7217 at the previous close.

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David Whetstone
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Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer