Who sets rates

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Over the past week Peter Muirhead and Ian Lewis have, in letters to The Scotsman, used terms such as “risible” to describe my challenge to Gordon Brown’s claim that an independent Scotland’s mortgage rates would be set by the rest of the UK.

Mr Lewis even claimed (Letters, 10 November) that, collectively, they had “explained [to me] how interest rates work”.

Perhaps, if they are reluctant to believe me, the last word should be reserved to the Council of Mortgage Lenders (CML) itself, whose explanation of this exact issue in November 2008 could not have been clearer.

Under pressure from none other than Gordon Brown’s Treasury after mortgage rates remained unchanged despite a substantial cut in the Bank base rate, the CML made the following statement: “The real cost of funds to lenders is determined not by the Bank base rate, but by their own cost of borrowing.”

It seems that Mr Brown knew (or should have known) 
perfectly well that the scare-
mongering claim he made a week ago was incorrect.

C Hegarty

Glenorchy Road

North Berwick