Britain’s banks were in the dock on Tuesday over alleged “profiteering” as millions of people struggle to get by during the cost-of-living crisis.
The financial watchdog has summoned the four big banks for a showdown meeting on Thursday over their conduct.
Government minister Johnny Mercer told Sky News: “Interest rates are going up and the Government wants to see those passed on to savers.
“You don’t want to see any profiteering like this, particularly when life is really, really tough for people out there at the moment, around interest rates...so yes, look it does not sound good.”
Told by presenter Kay Burley that the difference between savings and mortgage rates was as much as 4 per cent in some cases, Mr Mercer replied: “It does sound like profiteering.
“The regulators will call them in and let us see what happens.”
Top bankers have been summoned to a meeting with the financial watchdog to discuss concerns surrounding rises in interest rates for savers lagging behind the cost of mortgages.
The Financial Conduct Authority (FCA) expects chief executives from HSBC, NatWest, Lloyds and Barclays to attend on Thursday amid allegations of “blatant profiteering”.
But sources were playing down the likelihood of a charter being drawn up in the vein of the one agreed between Chancellor Jeremy Hunt and the big mortgage lenders.
MPs on the Treasury Committee were stepping up their campaign to increase saving rates for lenders, which are failing to keep up with soaring mortgages.
They wrote to the four biggest lenders demanding answers to their concerns that saving rates are “too low” in the light of the base interest rate reaching 5 per cent.
Dame Andrea Leadsom, the former Cabinet minister who sits on the committee, said that “it’s quite clear they have failed to pass on the rise in interest rates to savers”.
Colleague Dame Angela Eagle added: “This blatant profiteering has been shocking, and it’s clear to me this behaviour is miles away from the incoming requirement for firms to treat their customers fairly and with respect.”
From the end of July, a new consumer duty will be introduced to force financial firms to put consumers at the heart of what they do.
The average easy access savings rate on the market is at 2.43 per cent, according to financial information website Moneyfactscompare.co.uk, while savers looking for a one-year fixed-rate account can get 4.82 per cent typically.
But the average two-year homeowner mortgage rate on the market is 6.42 per cent.
Ministers have also been concerned about the issue, with Work and Pensions Secretary Mel Stride acknowledging there are “questions to be asked” of the banks.
The banks have denied profiteering.
