Jul 3, 2023
Bank bosses summoned to talks over savings rates
Bank chief executives have been summoned by the UK's financial watchdog to address concerns that savings rates are not rising as fast as mortgages. Last week, figures released to the BBC by financial information firm Moneyfacts showed the gap between average mortgage and savings rates was wider than it was in December 2021, when the Bank of England first starting increasing interest rates in its battle to slow the speed of rising consumer prices. The average two-year fixed mortgage rate was 2.38% and the average easy access savings rate - which is the most common savings account based on £10,000 of savings - was 0.19%, a gap of 2.19%. On Monday, the average two-year mortgage deal hit 6.42% and the savings rate was 2.43%, a gap of 3.99%. While the gap has widened since interest rates were first raised, it is smaller than in December 2022, when it was 4.24%. Banks' profits are generally increased by interest rate rises, as it typically boosts net interest income: the amount of money banks can increase borrowing costs by, versus the amount they pay out in interest on deposits. In February, the chief executives of four of the UK's biggest banks - NatWest, Lloyds, HSBC and Barclays - were questioned by MPs over the generosity of their savings rates. "Savings rates are driven by a number of factors, not just the Bank of England's Bank Rate - one key factor is whether someone wants instant access or can deposit money for a longer period of time," the body has said.
Related companies
Make a complaint about Barclays by viewing their customer service contacts.
