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Image source, Getty Images
By Michael Race
Business reporter, BBC News
The bosses of Lloyds, HSBC, NatWest and Barclays are to face questions from the regulator over concerns that interest rates on savings are too low.
Interest rate rises have led lenders to hike mortgage costs, but savings rates have not been rising as fast.
It has led to concerns banks could be making excess profits, and bank bosses will be quizzed by the Financial Conduct Authority later on Thursday.
Chancellor Jeremy Hunt has said the watchdog has his "full backing".
Mr Hunt has claimed that banks have been "too slow" to pass on increases in interest rates to savers, arguing it is an "issue that needs solving", particularly for people with instant access accounts.
It is understood the FCA will press the big four on their savings rates at the meeting. A source has told the Financial Times that the regulator believes banks could provide more value to customers.
Figures released on Wednesday showed the average two-year fixed mortgage rate was 6.51%, while the average, and most common, easy access savings account rate based on £10,000 of savings, was 2.48%.
The gap, 4.03%, is almost double what it was in December 2021 (2.19%), when the Bank of England first starting increasing interest rates in an attempt to slow the speed of rising consumer prices.
The Bank has been increasing interest rates to make it more expensive for people to borrow money, and more worthwhile for them to save - the theory being that consumers will spend less and price increases will slow down.
Its base rate - which influences the mortgage and savings rates set by High Street banks - is now at 5%.
Analysis from banking giant JP Morgan has suggested interest rates in the UK could reach 5.75% by November, and be at a higher level for some time.
However, it warned that in a worst-case scenario, if inflation failed to come down, a base rate of 7% "might be required".
Banks' profits generally rise in line with interest rates, but lenders argue that savers have access to a host of competitive deals.
UK Finance, the trade body for the banking sector, has previously said saving and mortgage rates "aren't directly linked and therefore move at different times and by different amounts".
Lloyds and NatWest have not responded to the BBC's request for comment, but Barclays has said it "regularly" reviews its savings rates.
HSBC has said it has increased its savings rates "more than a dozen times since the beginning of last year".
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