Skip to main content

‘Profiteering banks pick the pockets of households across Britain’

Biggest banks make £7bn in extra profit from rise in borrowing costs

YET another rise in interest rates will hit workers while allowing “profiteering banks to pick the pockets of householders across Britain,” unions warned today.

The intervention came after the Bank of England introduced an 11th-successive increase in its base rate — by 0.25 per cent to 4.25 per cent — following an unexpected rise in already 40-year high double-digit inflation last month.

The independent bank’s boss Andrew Bailey, who has called for workers to show “wage restraint” despite soaring price rises, with the CPI figure hitting 10.4 per cent in February, attempted to strike an optimistic note, suggesting the British economy is “resilient.”

But Unite the union slammed the latest interest rate rise, which will see housing costs for many mortgage-payers and likely renters increase once again, as it published new research showing banks have already pocketed billions of pounds in extra profit in recent months.

Comparing 2019 to last year, four major high-street banks — Barclays, HSBC, Lloyds and NatWest — have made a whopping £7 billion from net interest income by raising interest rates for borrowers and not passing it on in higher rates for savers’ deposits, the union charged. 

Financial sector profits have risen nearly three times as quickly as workers’ income — 14.2 per cent compared to just 4.9 per cent — since the rate rises began in late 2021, Unite added. 

Its separate analysis of Office for National Statistics data also reveals that the rising cost of household spending on financial services may contribute a further 1.5 percentage points towards inflation, worsening the harshest cost-of-living crisis in decades.

Unite general secretary Sharon Graham said: “Banks treat these rises as a licence to pick the pockets of householders across Britain. 

“Unbridled profiteering is taking billions of pounds away from workers and communities and putting it into the hands of corporate Britain.

“Last year, the profits of the big four banks soared to an eye-watering £33bn — politicians need to wake up.

“It’s only by taking on runaway profiteering that we can end the cost-of-living crisis.”

Shadow chancellor Rachel Reeves said the latest move by the central bank — granted independence by New Labour prime minister Tony Blair in 1997 — will be a “source of huge concern for families across the country who will be thinking about the impact this will have on their finances.

“The government thinks the cost-of-living crisis is over, but the reality is that too many families are dealing with soaring food prices and a Tory mortgage penalty,” a reference to former PM Liz Truss’s botched Budget last autumn.

Ms Reeves, Labour’s MP for Leeds West, slammed Chancellor Jeremy Hunt’s “unjustified” decision to give the top 1 per cent of pension savers a £1bn tax cut in last week’s spring Budget “while working people’s taxes go up.

“Labour will bring the sound economic management urgently needed to stabilise the economy,” she claimed. “Our mission to have the highest sustained growth in the G7 will get us back on track again.”

OWNED BY OUR READERS

We're a reader-owned co-operative, which means you can become part of the paper too by buying shares in the People’s Press Printing Society.

 

 

Become a supporter

Fighting fund

You've Raised:£ 13,288
We need:£ 4,712
3 Days remaining
Donate today