Banks to face watchdog’s questions in days as they’re accused of not passing on interest rates to savers

BANKS have profiteered by not passing on soaring interest rates to savers, a minister blasted today.

Johnny Mercer slammed city fat cats for failing to put the needs of hard-up households before profit margins.

It comes as the major banks have been hauled in by the industry watchdog for a meeting todau to explain why interest rates are being passed on to mortgage holders but not savers.

Chiefs at HSBC, NatWest, Lloyds and Barclays are among those set to meet with the Financial Conduct Authority, as the cost of borrowing sits at an eye-watering 5%.

Veterans Minister Mr Mercer told Sky News: "Interest rates are going up and the government wants to see those passed on to savers.

"You don't want to see any profiteering like this, particularly when life is really tough for people out there at the moment around interest rates.

"It doesn't sound good and I suspect the Treasury will look at it today."

Asked this afternoon whether banks are profiteering, Rishi Sunak's spokesman said: "It's something the regulator is looking into. In this case, the FCA are having a meeting at 1.30pm today with Lloyds, NatWest, HSBC, Barclays and others to explore how well banks are supporting savers and if they are passing through interest rates as they should be doing.

"The FCA are committed to reporting by the end of the month and then we will respond to their findings."

The big banks have denied profiteering from the cost of living crisis.

But yesterday members of the Commons Treasury Committee accused chiefs of showing a "shocking" lack of respect for customers.

In a letter to the CEOs of Britain's four biggest lenders, MPs raised concerns about a failure to substantially raise returns on accounts that don't force customers to lock in cash, pay monthly fees or limit withdrawals.

Labour MP Angela Eagle said: “In the middle of a cost of living crisis, the high street banks are squeezing higher profits from their loyal savings customers.

“This blatant profiteering has been shocking, and it’s clear to me this behaviour is miles away from the incoming requirement for firms to treat their customers fairly and with respect.”

Treasury Committee Chair Harriet Baldwin said: “With interest rates on the rise and our constituents feeling squeezed by rising prices, it is only right that the UK’s biggest banks step up their measly easy access savings rates.

"The time for action is now."

Mr Mercer added to the wrath saying: "It does sound like profiteering.

"The regulators will call them in and let us see what happens."