Pressure from the Government on the Banks is finally starting to pay off. The main mortgage lenders have started to respond to the demand that they should cut their mortgage lending rates. The Nationwide, HBOS, Royal Bank of Scotland, Natwest and the Northern Rock will cut their main variable lending rates by the full 1.5% on 1 December. (more…)

HBOS’s share price bounced back to end the week at 321.75p, up 13.69% on the day. Earlier this week there had been concerns about the success of HBOS’s £4bn rights issue as the shares traded below the 275p rights issue price. On Wednesday, the shares closed at a low of 258p. Dresdner Kleinwort and Morgan Stanley, the underwriters of the issue, will be able to breathe a temporary sigh or relief as they were facing a £250m paper loss had the share price not recovered. Although they may not be out of the woods just yet.