Banks slated over interest rate rises

A number of leading banks in the UK have been in the firing line over the interest rate rises that they have applied to borrowing and savings.

A number of banks have been found to have applied over and above the latest Bank of England interest rate of 0.25 percent when it comes to borrowing, yet no more than the 0.25 percent rise – if that – on savings. This is enabling the banks to maximise on profits whilst seeing consumers lose out no matter what.

The Halifax, Intelligent Finance, Standard Life, and the Nottingham Building Society are amongst those that have been slated for boosting their own profit margins by fleecing customers on both borrowing and savings. Campaigners are outraged by the move, but experts state that although it is wrong there is nothing that can be done about it because there are no regulations in place to stop this sort of practise.

A spokesman from the Independent Banking Advisory Service stated: 'This is nothing short of a scam. The banks are simply lining their pockets at the expense of struggling customers. It is unfair and a disgrace, but there is no regulatory system in place to put a stop to it.'

A Moneyfacts analyst stated: 'I can't see any reason to increase the mortgage rate by more than the base rate other than to increase profitability. People whose mortgage payments are tied to the standard variable rate of their lender will have expected the rate to move in line with the Bank of England base rate. There may well be something in the small print which allows for a rise above any base rate change, but that is not very transparent for customers.'

Tom Smith
11.06.07