Northern Rock cuts variable rate

Northern Rock, the British mortgage bank, has decreased the variable interest rate on its demand deposit account from 5.75 per cent to 5.5 per cent. The Direct Saver account was launched in November 1999 and still offers the most competitive rate on the market for amounts over £1,000 (€1,269).

When the account was introduced the variable rate was guaranteed to be 1 per cent above the European Central Bank (ECB) rate until January 1st, 2001. After that date, the rate is guaranteed to be 0.5 per cent above the ECB rate until July 1st, 2001, and subsequently the rate will be equal to the ECB rate until January 2002. The ECB rate is currently 4.75 per cent.