Cabinet ‘backs down’ on bank rates

The Government has been accused of backing down on its threats to take action against banks over high interest rates in the face of opposition from the European Commission.

Just days after Taoiseach Enda Kenny signaled moves would be taken to deal with lenders in the October budget because of their refusal to make substantial cuts to variable mortgage rates, Brussels declared such action could undermine the financial sector.

Opposition TDs insisted Government threats to take on the banks were always empty and Finance Minister Michael Noonan would now use the European Commission report as cover to do nothing after claiming lenders had moved on the issue.