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Issued: 11 August 2016

By now, you will no doubt be aware of the interest rate change announced by the Bank of England on 4 August, which reduced the Bank of England Bank Rate to an historic low of 0.25%. Since then, interest rate reductions have been announced by a number of savings and mortgage providers, and many others are currently reviewing their rates. As expected, there has been a great deal of speculation in the media about this, as the change is good news for borrowers and bad news for savers.

Following our own rate review, our mortgage Standard Variable Rate will be reduced by the full 0.25% on 25 September. The rates relating to our tracker mortgages which are linked to Bank of England Bank Rate will also be reduced on 25 September. All borrowing customers affected by the change will be written to in due course, with details of the rate changes relating to their specific mortgage arrangements.

For our savings customers, we are sorry to tell you of interest rate reductions, although no variable rate account will be reduced by more than 0.25% and no personal savings account will pay less than 0.31% after the changes. Unfortunately these rate reductions are unavoidable; however, our average variable interest rate will be 0.99% after the changes, which is almost four times the level of the Bank of England Bank Rate. We are therefore confident that our rates will remain competitive.

All affected savings customers will receive notification of the rate changes applicable to their accounts within the next few days. Our easy access savings rates will be reduced on 28 August; our 45 day notice accounts will be reduced on 12 October; and our 90 day notice accounts will be reduced from 26 November.

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