Final UK interest rate rise expected in May; profits driving up inflation, warns ECB; US jobless claims rise – as it happened
Economists predict inflation will prompt Bank of England to lift rates again in May, for last time in current cycle
Loyal savers are losing out as banks fail to pass on interest rate increases to their existing customers, the head of the UK's financial watchdog has told MPs.
Nikhil Rathi, chief executive of the Financial Conduct Authority, told the Treasury Committee that banks typically offer less attractive savings rates to existing customers.
It is, and has been, standard practice for firms to offer more attractive rates to new savers, while leaving existing savers earning less competitive rates.
We expect that the harm from this practice (and the loyalty penalty faced by longstanding customers) will have increased as the base rate has risen.
We would encourage consumers to actively consider switching should they be dissatisfied with the value they are getting from their current provider.
The regulator has now given us official confirmation that the UK's biggest banks are profiting from interest rate rises and that loyal savers are being increasingly harmed.
While it's welcome to hear the financial regulator is monitoring this situation, we will be keeping a close eye to ensure they act on these assurances. Consumers should continue to shop around to get the best rates possible.
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