UK banks slow to pass on interest rate increases to savers, says finance minister
Britain’s finance minister Jeremy Hunt stated on Monday that banks are not passing on increases in central bank interest rates to savers quickly enough, creating a problem that needs to be resolved. Banks have been quick to pass on higher interest rates to mortgage customers but have delayed offering higher returns on savings, particularly with instant access accounts, said Hunt.
Parliament’s Treasury Select Committee addresses issue
Earlier this month, the Treasury Select Committee reported that while UK lenders had raised rates on easy access savings accounts recently, these rates were still behind the Bank of England’s base rate. The committee noted that on June 8, Britain’s four largest banks – Lloyds, NatWest, HSBC, and Barclays – were offering rates of 0.7-1.35% for easy access savings accounts, whereas the central bank’s base rate was 4.5%. The committee highlighted that approximately 60% of household deposits are held in instant access accounts.