Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make it his policy to require banks to offer interest rates on saving accounts at least at the level of the Bank of England interest rate.

The Chancellor has made clear his expectation that savers benefit from rising interest rates. On 28 June, the Chancellor secured agreement with the regulators to act urgently in areas where consumers need most support. This included agreeing with the Financial Conduct Authority (FCA) that it would report on the savings market. As part of this review, the FCA published a 14-point action plan setting out expectations of firms and actions it will take to ensure savers are not missing out on Bank Rate rises.

The FCA has committed to review the timing of savings rates changes after any changes in the Bank of England’s Base Rate, and to publish analysis of firms’ easy access savings rates, listing best to worst, every six months. In addition, the FCA’s new Consumer Duty requires firms to explain the pace and extent of their pass through of interest rates, and how they are proactively supporting savers to switch to high interest rate products.

Under the Consumer Duty, firms are required to ensure that the savings products they offer delivery fair value to customers and the FCA will act if it finds this is not the case. The FCA will publish an update on this, including any steps it plans to take, later in autumn 2023.