Banks lower interest rates

Major retail banks have reduced interest rates following the European Central Bank's latest decision to lower its refinancing rates by 50 basis points to 3.25 per cent - the lowest in two years.

HSBC Bank has reduced its base rate for all lending, except mortgages, to 3.55 per cent. The base rate for the bank's variable mortgage lending was lowered to 3.35 per cent.

Bank of Valletta lowers the savings accounts rate by 0.25 per cent resulting in an interest rate of one per cent. Interest rates on all other euro-denominated deposit accounts will also be lowered, the bank said. The mortgage base rate will be reduced by 0.50 per cent to 3.25 per cent and the base rate for commercial loans, overdrafts, personal loans and credit card accounts to 3.45 per cent.

The ECB's rate cut follows the Bank of England's decision to cut the British interest rate by 150 basis points to three per cent. Another ECB rate cut is widely expected next month.