HSBC slow to pass on rate cuts - govt should penalise (HSBA)

LONDON, Oct 8 (Reuters) - British banks HBOS, Lloyds TSB and Barclays will pass on to borrowers the full benefits of a surprise half a percentage point cut in interest rates by the Bank of England.
Both HBOS's Halifax and Lloyds TSB, among the beneficiaries of a multi-billion pound rescue package announced by the government on Wednesday, said they will reduce standard variable rates on mortgage products to 6.50 percent from Nov 1.
Santander's British unit Abbey, HSBC, Royal Bank of Scotland and Alliance and Leicester said their mortgage rates were under review following a cut in interest rates to 4.5 percent from 5 percent that was co-ordinated with other central banks.