Skipton MD confident it can still offer attractive rates

The Bank of England monetary policy committee last week told High Street lenders to prepare for negative interest rates at any point after six months if such a measure proved necessary to meet its 2% inflation target and in line with the evolution of the economic outlook. But the MPC stressed that it did not want to send a signal that such a move was ‘imminent or indeed in prospect at any time’.

Skipton International boss Jim Coupe said: ‘Last year Skipton completed a review of technical capability to operate zero or negative rates and found that Skipton has the operational functionality if required. Clearly further reductions in base rate will be unwelcome for savers on variable rate products or with fixed rates maturing as it is likely that market rates will be affected. Skipton offers attractive rates and would expect to continue to do so.

‘Actual rates offered at any point of time are a function of the competitive environment and hence we cannot be explicit about likely rates at this time. Customers with fixed rate savings products will not be affected by changes in the base rate until their products mature.’

He added: ‘Mortgage customers on fixed rate products will not be affected by changes in the base rate until maturity.

‘However, it is likely that Skipton will already offer many of our customers lower rates on fixed rate maturity, following last year’s base rate reductions.

‘As base rate tracker mortgages tend to have “floors” set it is unlikely many customers will see rates change until product maturity.’

Mr Coupe also spoke about the local property scene in the wake of the first lockdown in Guernsey last year and the second lockdown this year.

‘Even with reduced activity for two or three months during lockdown, the 2020 total number of property purchases bonds increased by 8% to 798 in comparison to 2019,’ said Mr Coupe.

‘Last year saw a post-lockdown spike in property sales, with many islanders looking for more space for home working and larger outdoor space for recreational activities.

‘The increase not only demonstrates the stability of the local property market but more generally the local economy.

‘Skipton experienced a substantial increase in savings deposits and completions for our Channel Island and UK mortgages since last year’s lockdowns, resulting in our balance sheet exceeding £2bn of assets for the first time.

‘Significant reductions in National Savings and Investments interest rates last November led to an increase in interest in other savings providers, including Skipton, and facilitated a general reduction in savings rates across the market.’