Jeremy Hunt tells banks to raise rates for savers to offset the pain caused by spiralling mortgage bills
Chancellor Jeremy Hunt has urged banks to pass on more of the benefit of higher interest rates to savers in an attempt to offset the pain being caused by spiralling mortgage bills.
Writing in today’s Mail on Sunday, Mr Hunt – who met banking bosses in Downing Street on Friday to agree a package of measures to help mortgage holders – said he had made it clear to the companies ‘that on the other side of the coin we expect savers to be getting a fair deal’.
He added: ‘People are rightly frustrated that when interest rates rise, savings rates do not rise as fast. That’s why the regulator, the Financial Conduct Authority, has written to banks to express that savings rates should be rising. It is an issue I am closely monitoring.’
Chancellor Jeremy Hunt leaves Downing Street with the despatch box to present his spring budget to parliament on March 15
The Bank of England last week raised interest rates by 0.5 per cent to five per cent – the highest level since 2008 – in an effort to reduce an inflation rate of 8.7 per cent.
Mr Hunt wrote: ‘High inflation is one of the most destabilising forces in any economy. It eats away at people’s pay cheques, making food, energy and other essentials more expensive.
‘It is the most insidious of taxes because at least through general taxation we all benefit from well-funded public services such as our NHS, schools and police. With inflation, you get absolutely nothing in return,’ he added.
‘The single best way to reverse this trend and bring down costs – from the weekly shop to mortgage payments – is by squashing inflation. There is no other alternative.
‘The Prime Minister and I promise that we will get through to the other side. We have our plan of action, and we need to stay the course – it is the only way to relieve pressure on families with mortgages and reduce costs across all our bills.’
