Banks and building societies warned to stop ripping off savers
BANKS and building societies have been warned to stop ripping off savers.
They have been accused of failing to pass on higher interest rates to investors while being quick to increase rates for borrowers.
Now watchdogs are threatening “robust action” unless they fall into line and do their bit to ease the cost of living crisis.
Interest rates have climbed 13 times in the last year or so as the Bank of England battles inflation.
On Thursday it is expected to sanction a further rise from its current level of five per cent.
Yet the average easy access savings rate languishes well below that at just 2.78 per cent, according to rates analysts Moneyfacts.
And the Bank reckons around £250billion of Brits’ savings are sitting in deposit accounts that earn no interest at all.
Rules coming in this week will order finance firms to prove they are offering customers fair value.
The Financial Conduct Authority said they would give them to the end of the month to comply.
Sheldon Mills, consumer and competition chief at the FCA, added: “We want a competitive cash savings market that delivers better deals for savers, where interest rates are reviewed quickly following base rate changes and firms prompt savers to switch to accounts paying higher rates.”
Consumer group Which? welcomed the move.
Spokeswoman Rocio Concha said: “Some high street banks have been offering meagre rates to customers for a long time.”
But Eric Leenders of UK Finance, which represents banks, insisted: “UK banks have passed through a greater proportion of interest rate rises to savers than in other countries.”
Food inflation down
FOOD price inflation has slowed to its lowest level this year but was still 13.4 per cent in July, down from 14.6 per cent the month before.
The British Retail Consortium said the cost of oils, fish and cereals had fallen.
But it warned there were “dark clouds” ahead as supply chain issues could add to retailers’ costs for months.