Banks told to pass on big interest rate rises to their savings accounts

BANKS are ripping off their customers by failing to pass on higher interest rates to easy-access savers but jacking up the price of borrowings and mortgages.

The Treasury Select Committee yesterday accused them of squeezing savers by offering “measly” rates to bolster profits.

Britain’s banks have enjoyed bumper profits this year as interest rates have risen from 0.1 per cent in November 2021 to 4.5 per cent last month.

They generate a profit based on the difference between the interest they pay to savers and the interest they get back from borrowers.

While the base rate has shot up, Britain’s four biggest banks currently charge rates of between 0.7 and 1.35 per cent.

So-called “challenger” banks Virgin Money, Santander, Nationwide and TSB offer even less at 0.25 to 1.25 per cent.

Meanwhile, the average two-year fixed mortgage has doubled from 2.5 per cent to 5.2 per cent.

Around 60 per cent of household deposits are held in instant access accounts, according to the Bank of England, who last month also criticised banks for “unusually weak” passing through of higher rates.

Harriet Baldwin, chair of the Treasury Select Committee, said: “We want to shine a spotlight on this so Sun readers know they should switch banks if they are being paid measly rates in the same way they shop around for groceries.

“We want to stop the banks taking advantage of loyal savers.”

Housing fears on high rates

HOUSEBUILDER Crest Nicholson has warned the market will continue to struggle if interest rates carry on rising.

Its shares dropped almost eight per cent after reporting a 60 per cent drop in underlying pre-tax profits and a 22 per cent slide in sales to £282.7million.

Boss Peter Truscott said the ongoing lack of housing supply meant prices and rents kept rising, but first time buyers had been hit by the higher cost of borrowing and end to Help to Buy.

Of interest rates going up, he said it will “exacerbate this issue even further and start to impact demand and confidence again”.

Selling porkies

PERCY Pig is having the last snort after getting the better of sweet rival Swizzels.

Marks & Spencer had taken the confectionary firm to court — claiming its “Pigs Mugs” treats were so similar customers could have been duped into buying the wrong ones.

Swizzels had been selling them since 1996.

But it has now agreed to change the design as part of an “amicable resolution” that has been reached by the two companies.

M&S has become more protective of its Percy Pigs after turning them into a multi-million pound brand that includes onesies, bath towels, pyjamas and milkshakes.

Court documents revealed that they sell 271 bags of Percy Pigs a minute.

Sex cllaim odey hit by probe

THE financial watchdog is investigating Crispin Odey’s firm after allegations of sexual harassment and assault by the hedge fund tycoon.

The Financial Conduct Authority had already been investigating Odey Asset Management's governance — but will now widen the scope to include potential non-financial misconduct by Mr Odey.

Mr Odey rose to fame in the City by betting on Britain’s banks before the 2008 financial crisis, and his firm was once one of Europe’s largest hedge fund companies.

But a report by the Financial Times has accused the titan of mistreating 13 women — with claims ranging from crude comments to groping and sexual assault — since 2004.

The 64-year-old, worth an estimated £800million, was previously cleared of sexual assault in 2021.

He yesterday told Reuters the allegations were “a rehash, none have been stood up in a court room”.

Back in biz Wizz

BUDGET airline Wizz Air hopes last year’s turbulence is over as it eyes a return to profit with summer holiday bookings.

The carrier made an ill-timed move last year to abandon fuel contracts, leaving it exposed to rocketing fuel costs when Russia invaded Ukraine.

Wizz Air said it expects to make up to £386million this year, compared to its loss of £459million for the year to the end of March.

On the back of a travel boom, CEO József Váradi said he was “very confident”.

Euro bloc sink

THE eurozone sunk into a shallow recession this year — despite politicians arguing a downturn could be avoided.

The 20-nation bloc shrank by 0.1 per cent between January and March as rising prices took their toll, having dropped by the same amount over the winter, updated Eurostat figures found.

It takes two negative quarters to be a technical recession.

Last month Germany said it had fallen into a mild recession, contributing to the sink.

Ireland’s economy performed worst, down by 4.6 per cent.

6-day post row

MINISTERS have blocked Royal Mail's efforts to scrap Saturday letter deliveries despite warnings it will lead to even higher stamp prices.

The embattled postal service has argued its business is unsustainable and losses will continue to mount unless it is allowed to drop its six-days-a-week delivery obligation.

But Business minister Kevin Hollinrake said there are “no plans to change the minimum requirements of the service”.

Royal Mail boss Keith Williams has warned of raising first-class stamps from £1.10 to afford the service.