Jeremy Hunt has joined the ranks of those claiming that big UK banks aren’t doing enough to soften the blow of skyrocketing consumer borrowing costs by hiking savings rates. Lenders shouldn’t be surprised at the renewed heat, writes gfhay
, all of whom already flagged how unusually slow British banks have been to pass on rising rates to customers. But there are grounds to be more proactive. Lenders with a big share of the market have an incentive to drag their feet on hiking savings rates: 60% of their deposits are in the form of interest-paying instant access current accounts, where customers may be more worried about the disruption of changing provider than hunting for the best rate.
in NatWest to oblige it to pay more. After all, the government would only be getting banks to do what they should be doing anyway.Britain’s finance minister Jeremy Hunt said on June 26 that banks were too slow to pass on increases in central bank interest rates to savers and that the problem needed to be resolved.
“It is taking too long for the increase in interest rates to be passed on to savers, particularly with instant access accounts,” Hunt told parliament. “I am working on a solution because I think it is an issue that needs resolving.”
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