MPs to question UK’s biggest banks on savings rates, bank branch closures and changes to financial regulations
The Treasury Committee hears from the UK’s ‘big four’ largest banks in a wide-ranging session on savings rates, the mortgage market, bank branch closures and reforms to financial services regulations at 9.45am on Tuesday 7 February.
Customers of Barclays, HSBC, Lloyds Banking Group and NatWest Group can expect to earn between 0.5 and 0.65 per cent interest on basic savings accounts. MPs on the cross-party Committee will ask why these rates are so low, and whether banks can be doing more to advise customers on how to arrange their funds to maximise the return they receive.
Harriett Baldwin MP, Chair of the Treasury Committee, said:
“We look forward to questioning the leaders of the UK’s biggest banks on issues of fundamental importance to our constituents. Public scrutiny of our largest financial institutions is vital. We look forward to hearing their views on a variety of topics, including savings rates, the outlook for the mortgage market, bank branch closures and changes to financial services regulations.”
The Committee may explore whether banks are boosting their profits by increasing the gap between the interest paid out to savers and the interest paid in by borrowers.
According to the Bank of England, variable-rate mortgage holders were paying over four per cent interest at the end of 2022, up from two per cent at the start of the year. Interest earned by savers with fixed-rate ISAs rose from half a per cent to one per cent in the same period.
The outlook for the mortgage market after last year’s mini-budget is likely to be discussed, as is lifting the cap for bankers’ bonuses, and the Government’s planned changes to the accountability regime for senior managers.
The Committee is likely to discuss the Government’s ‘Edinburgh Reforms’ to financial services. The witnesses could be asked their views on plans to relax the ring-fencing regime, which separates retail from investment banking.
The Committee is also likely to explore how banks are assisting customers in financial difficulty following interest rate rises, and the extent to which access to cash is impacted by bank branch closures.