Barclays profits tumble 12% as UK interest rates hit mortgage demand

Barclays also came under pressure to raise interest rates for savers, putting a further squeeze on the bank’s income. Photograph: Ian West/PA

Profits at Barclays tumbled by 12% in the first quarter, as higher UK interest rates weighed on demand for mortgages and loans while a backdrop of economic uncertainty affected its investment bank.

The UK bank said pre-tax profits fell to £2.3bn in the first quarter, down from £2.6bn last year, when it reported the strongest quarterly profit since 2011 after a string of interest rate hikes by the Bank of England.