Bosses at HSBC, Natwest, Lloyds and Barclays are expected to meet with the Financial Conduct Authority (FCA) on Thursday (6 July) following concerns that interest rates on savings accounts are considerably lower than those on increasing mortgage costs.

The Bank of England (BoE) has risen interest rates from 0.1% to 5% over the last 13 consecutive meetings.

However, the typical rate on an easy-access savings account is just 2.43%, compared to 6.42% on a two-year fixed mortgage deal, Moneyfacts has revealed.

Interest rates are also expected to rise further to 5.5% on 3 August, when the BoE’s Monetary Policy Committee meets.

Chief executive officer at mycommunityfinance.co.uk, Tobias Gruber, added: "The FCA's intervention to hold UK's high street banks accountable is a long-awaited battle cry against their unjust practices. Despite making billions from borrowers through swift interest rate hikes in the past year, these banks have shamelessly neglected savers, leaving them in the shadows.

"Passing on interest rates to savers is vital to maintain trust in the banking system, promote responsible saving habits, incentivise individuals, and contribute to overall economic stability".

Head of personal finance at Hargreaves Lansdown, Sarah Coles, said: “When the high street banking giants are hauled over the coals by the regulator, they may make some small concessions, but there are several persuasive reasons why they might choose to stand firm.
Fortunately, you don’t have to settle for the miserable rates they’re offering, because even if they don’t move an inch, you could boost your returns significantly.

“The banks still don’t really need our money. Despite the horrible rates on offer, they’re still sitting on piles of lockdown savings, and cheap cash from the money-printing era. Meanwhile, the fall in mortgage approvals means they don’t need as much money for new borrowers, so there’s no real incentive to push up their rates and bring more funds in through the door.

“Maintaining a large gap between savings and mortgage rates means they make more money. While interest rates were ultra-low, the mortgage market was incredibly competitive, so they were operating on unusually small margins between savings rates and mortgage deals. The rise in rates has given them an opportunity to make up for lost time, so they’re busy filling their boots.”

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