HSBC says to pass on Bank rate cut

LONDON (Reuters) - HSBC said on Thursday it would pass on the Bank of England's latest 0.5 percentage point interest rate cut in full to its mortgage and business customers.

In a statement, HSBC said the move would reduce its variable mortgage rate to 3.94 percent, while small businesses holding floating rate loans -- accounting for 97 percent of its SME customers -- would also benefit from the cut in full.

Lloyds TSB unit Cheltenham & Gloucester also said late on Wednesday that it would cut its variable rate by the full amount of any reduction by the Bank.

However, Nationwide, the UK's second-biggest mortgage lender, said last week that it would not pass on any further rate cuts to customers holding tracker loans.

The government has repeatedly urged the country's lenders to help stimulate the economy by passing on in full any central bank rate cuts.

The Bank's 0.5 percentage point rate cut on Thursday takes its base rate to a record low of 1.5 percent. The central bank has now cut rates by a total of 3.5 percentage points since October in an effort to ward off recession.

(Reporting by Myles Neligan; editing by John Stonestreet)