More than three quarters of lenders have failed to pass on the Bank of England’s half-point cut in interest rates, despite further falls in interbank lending rates, it was revealed yesterday.

The British Bankers’ association yesterday said the London Interbank Overnight Rate now stood at 4.75%, compared with the Bank of England’s base rate of 4.5%.

However, lenders such as HSBC, Britain’s largest mortgage provider, had not passed on the full cut to their customers.

Alliance & Leicester, which has reduced its standard variable rate to borrowers by only 0.25%, said Libor “needs to go down further and it’s too early to start having an impact on our rates”.

Financial Times