Nearly half of providers haven’t passed on last month’s 0.25 percentage point Base Rate cut to their standard variable rates, according to Moneyfacts.

Plus the financial information provider noted that average rates have not dropped by nearly as much as borrowers may have expected in the last four weeks.

Not the full amount

Moneyfacts found that average standard variable rates have dropped from 4.8% to 4.71%, nothing like the full amount of the rate cut.

And two-year fixed rates have fallen even less – from 2.48% to 2.45%.

The biggest drops are on tracker deals, which is to be expected since they track the Base Rate at a set margin. Average lifetime tracker rates fell from 2.98% a month ago to 2.74% today. Two-year tracker deals dropped from 2.13% to 1.94%.

Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “Whilst the picture for borrowers isn’t bleak, it is definitely a mixed bag. Borrowers would have assumed that a 0.25% cut in base rate would make them financially better off, particularly if they were on a variable rate. However, this is unfortunately not the case, with just under half of providers failing to pass this cut on to their Standard Variable Rate (SVR) customers.

“With fixed rates at all time lows, borrowers sitting on their SVR would still be better off opting for a fixed rate. For example, borrowers would be £243.03* a month better off based on the average two-year fixed rate at 2.46% compared to the average SVR of 4.71%.

“The average two-year tracker rate has been reduced by 0.19%, so borrowers looking for this type of deal would have seen a better picture. However, shockingly some providers, preempting the announcement, chose to increase their variable rate products, meaning the reductions have been offset. To illustrate this, at the start of July the average two-year variable tracker rate stood at 2.01%. This had increased by 0.12% on 1st August, therefore reducing the effect of the reduction in the month of August to 0.07% in real terms.”