Banks slow to alter savings rate

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Banks slow to alter savings rate

Fri 25th Aug 2006

Many banks have not altered their savings rate following the 0.25 per cent increase in the interest rate by the Bank of England this month, according to Moneyfacts.co.uk.

The rise in the interest rate saw most banks raise the cost of borrowing on mortgages. However, there has not been a similar rise in the savings rate that should make saving money more profitable.

Andrew Hagger, head of news and press at Moneyfacts.co.uk, commented: "With over 80 per cent of mortgage SVR changes announced, we have seen a number of providers take the opportunity to make an increase greater than 0.25 per cent with Furness BS, NatWest and RBS increasing by 0.30 per cent and Standard Life by 0.31 per cent.

"On the savings front the picture is a bit different, in that only 62 out of 115 institutions have amended their rates so far, and of these 62 only 46 have increased their whole variable savings product range."

It is thought that some of the major high street banks such as Alliance and Leicester, Barclays and Nationwide will make a decision about how much they will change their savings rate over the next week.

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