Banks deny withholding interest rate cut

Irish Financial Services, a business group representing Ireland's banks, has reacted with anger to the Tánaiste's comments about the recent cut in interest rates by the European Central Bank.

Ms Harney reiterated over the weekend that she expected the banks to pass on the reduction to their customers and not use it boost their own profits.

She suggested that the Competition Authority would intensify its investigation of the banking sector if the interest rate reduction was not passed on to borrowers and mortgage holders.

However, IFS director Aileen O'Donoghue said: "We've only just seen the ECB cut the rate and we haven't yet had an opportunity to let the market operate.

"Institutions have already indicated that they will consider their position and they will make their decision known in the coming week or so."