Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential impact of interest rates on profits in the banking sector.

UK banks’ profitability has increased as a result of higher interest rates.

That said, increased competition in deposit rates offered by UK banks and macroeconomic uncertainty are likely to put downward pressure on banks’ profits.

The 2022/2023 Bank of England’s stress test indicates that major UK banks would be resilient to a severe stress scenario including higher interest rates.