Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps he is taking to ensure that financial institutions providing savings accounts to consumers reflect changes in the Bank of England's base rate of inflation in their financial products.

The pricing of financial products, including interest rates offered on savings accounts, is a commercial decision for firms and the Government does not seek to intervene in such decisions.

The independent Monetary Policy Committee (MPC) of the Bank of England makes monetary policy decisions independently of the Government. Therefore, the Government does not comment on the conduct or effectiveness of monetary policy. The MPC sets the base rate of interest, which is known as the Bank Rate. This is the rate of interest the Bank of England will pay on reserves held with them by commercial banks. MPC decisions over the Bank Rate guide commercial banks’ decisions over retail interest rates, i.e. interest rates they charge on loans and pay on deposits. However, savings providers also make commercial judgements that influence the degree of pass‐through from changes in the Bank Rate into retail interest rates, with conditions in financial markets and in the banking sector also influencing interest rates paid on deposits or charged for lending.