Banks 'using base rate to increase margins'

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Banks 'using base rate to increase margins'

New research from moneyfacts.co.uk has revealed that a number of banks have used recent changes in the Bank of England base rate to their advantage, increasing the margins on their current accounts.

According to Samantha Owens, head of personal finance at the website, Nationwide, Smile and Intelligent Finance, among others, cut their credit interest rates in the last two base rate cuts, but failed to pass on the benefit of the previous three increases to their customers.

She also noted that anyone with an overdraft on a Yorkshire or Clydesdale Bank current account will be paying 4.12 per cent more than they were at the beginning of last year.

Meanwhile, Lloyds TSB has not yet passed on any base rate cuts to its overdraft customers.

Ms Owens advised that there are some "great rates" on credit interest and authorised overdrafts to be found if consumers look around.

The Bank of England's monetary policy committee voted last Wednesday, March 5th, to hold the base rate at 5.25 per cent.
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