Banks face pressure to pass on interest rates to savers

Banks face pressure to pass on interest rates to savers

Britain's biggest banks are under pressure to pass higher interest rates to savers after figures show they have made an extra 7 billion dollars by refusing to do so, according to my colleague Richard Partington.

The Bank of England is expected to announce a further rise in interest rates on the day, and the Unite trade union said banks had already made billions of pounds in extra profit from the dramatic rise in borrowing costs.

Banks make money by charging higher interest on loans than deposits, using the central bank base rate as the reference point. The industry has come under fire from across the political spectrum for passing on the rise to borrowers amid the cost of living at a faster rate than for savers.

The Treasury committee of MPs said it was writing to the Financial Conduct Authority to make a statement about the issue, and that it was stepping up the pressure on the banking industry on Wednesday.

Harriett Baldwin, the Conservative chair of the committee, said:

Barclays, HSBC, Lloyds Banking Group and NatWest Group were forced last month to defend rates less than 1.3% on their easy-access savings accounts despite the Bank of England base rate rising to 4%.