Banks cutting savings prices after the Bank of England Rate Cut

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Dozens of High Street Banks and Building Companies have moved quickly to reduce rates on savings products following the Bank of England’s decision to lower the basic rate.

Nearly 40 providers have reduced their rates or withdrawn products, just days after Boe’s steps on Thursday last week to reduce the basic rate by a quarter to 4.5 percent.

Chase Bank told customers on Monday that it would reduce gross annual rates in its Saver account from 3.45 percent to 2.96 percent between February 13 and February 19.

Meanwhile, Barclays said it would reduce the rates of two products on Thursday, with its everyday savings account to drop from 1.50 percent to 1.25 percent on balance up to £ 10,000.

In addition, the rate of its rainy day saving falls from 5 percent to 4.76 percent on balance of balance below £ 5,000. The rates had previously remained unchanged from September 2023.

Tim Hogg, director of the Consumer Group Fair’s finance, said the banks were “tied to pass” Boe -rent cuts to consumers.

“This may leave a bitter taste in the mouth of consumers who feel they don’t benefit as fast when the basic rates rose, but in the end it is the case that the banking sector works.”

Of the best buyer, the Coventry Building Society offered the highest rate in easy access savings accounts from Wednesday by 4.85 percent, according to Moneyfacts, a financial data provider. The next highest rate on offer was 4.75 percent on Cahoots Easy Access account.

Hogg warned savors against “bait and switch” tactics for some providers who would “increase their easy access rates to make their products more attractive”.

“They go to the top of the best-buying tables, get more customers and then reduce their rates over time,” he said.

Such providers were “dependent on the fact that many customers do not change (again) after that,” Hogg explained.

Fairer Finance launched a new rating system this week to tackle the problem. It provides Star Ratings for Easy Access accounts based on their 24-month average annual equivalent rates.

The reviews are updated weekly and reward accounts that have offered the interest rate “consistently close” to Boe’s rates in the previous two years. Barclays’ Rainy Day Saver and Ford Money’s Flexible Saver Accounts topped the table this week.

In contrast, home buyers have had better news since the Boe -rate cut when Santander and Barclays announced that they would offer priority loans less than 4 percent for the first time since November last year. The offers apply to mortgages for values ​​of 60 percent.

However, fixed mortgage loans do not track basic rates as close as savings products and are driven by other factors, such as swap rates used by lenders for price loans. Average two-year fixed housing prices have fluctuated about 5.50 percent since the second week in January.

Further reporting from Joshua Oliver