Savers pay heavy price as banks cut interest rates

MORE than 30 banks and building societies have slashed interest on savings accounts after the Bank of England cut its base rate.

- Katie Elliott

Figures from Moneyfactscompare show the businesses have lowered rates on at least one product within days and some have made multiple reductions.

It came after the Bank of England cut its base rate to 4.5% from 4.75% last Thursday.

Moneyfactscompare.co.uk finance expert Rachel Springall said: "It's so disheartening to see savings rates chopped in the last few days, but it just proves why savers are at the mercy of base rate cuts.

"Not even challenger banks have been able to escape making cuts as the market sentiment for lower interest rates has taken charge."

The move comes in the face of complaints about banks and building societies being historically slow in rewarding savers when rates are going up.

Trend

On the same day the Bank cut the base rate, Skipton Building Society reduced its interest on variable accounts by up to 0.30%.