Banks aren’t passing interest rate hikes on to savers fast enough, chancellor warns
The chancellor has told banks “in no uncertain terms” they must pass on higher interest rates to savers.
Jeremy Hunt faced pressure from both Labour and his own Conservative backbenchers on the matter during a statement about support to mortgage holders agreed on Friday.
Labour’s Dame Angela Eagle – a Treasury minister under Gordon Brown – called on the banks to stop their “profiteering”.
The debate is over the speed at which rising interest rates are applied to savings accounts.
MPs wanted to know what was being done to ensure people’s nest eggs were growing as fast as their mortgage repayments are going up, as both are impacted by the Bank of England’s base rate.
Dame Angela noted that banks had made more than “£4bn extra” this quarter due to paying out below the current interest level but charging borrowers close to the Bank of England base rate.
The Bank of England last week hiked the base rate from 4.5% to 5%.
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Hunt: ‘We want to do all we can’
According to figures from Moneyfactscompare.co.uk, a typical easy-access savings rate was 2.35% – and the average easy-access ISA rate was 2.47%.
The chancellor met with senior figures from financial institutions like Lloyds, NatWest, Barclays and Virgin Money at the end of last week.
Mr Hunt told Dame Angela: “It is taking too long for the increases in interest rates to be passed on to savers, particularly with instant access accounts – the rates are more frequently being passed on to people who have fixed notice accounts, but she’s right there was an issue there.
“I raised that issue in no uncertain terms with the banks when I met them, and I’m working on a solution because I think it is an issue that needs resolving.”
Conservative MP Mark Pritchard also voiced concerns.
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What’s going on with mortgages?
He asked the chancellor what could be done to pass on interest rate increases to savers.
Mr Hunt told his party colleague that the passing on of rate hikes “can definitely happen better than it is now”.
Another Conservative MP, Robin Walker, called on Mr Hunt to “encourage the banks to pass on interest rates to savers”.
He said: “Will he recognise, though, that with so many people owning their properties outright and not having a mortgage on them today, actually increasing the payment for people who save is a very important element to tackling inflation.
“Can I wish him every success in his further conversations to encourage the banks to pass on interest rates to savers.”
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Chancellor Jeremy Hunt replied: “If more people are encouraged to save, that is technically counter-inflationary and is something to be encouraged.”
People spending money rather than save can cause inflation, as more people looking to buy things increases demand and therefore puts up prices.
World
Tomorrowland: ‘Devastating’ blaze destroys main stage at major festival – two days before it was due to begin
A huge fire has destroyed the main stage of a major festival in Belgium – two days before it was due to begin.
Tomorrowland is a dance music event as big as Glastonbury – and David Guetta was due to perform.
Footage showed flames and thick plumes of black smoke engulfing the stage and spreading to nearby woodland on Wednesday.
The fire gutted the main stage
Fire crews attempt to bring the blaze under control
The annual festival in the town of Boom, north of Brussels, is one of the biggest in Europe and attracts about 400,000 people over two consecutive weekends.
It is famous for its immersive and elaborate designs and attracts big names within dance music – including Guetta, best known for tracks When Love Takes Over and Titanium.
Dutch DJs Martin Garrix and Charlotte de Witte were also due to perform, along with the likes of Swedish House Mafia, Eric Prydz and Alok.
Black smoke could be seen rising into the sky
The festival’s website described the creative elements which went into the elaborate main stage.
The theme, described as Orbyz, was “set in a magical universe made entirely out of ice” and “full of mythical creatures”.
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Organisers said no one was injured in the blaze but confirmed “our beloved main stage has been severely damaged”, adding they were “devastated”.
Spokesperson Debby Wilmsen added: “We received some truly terrible news today. A fire broke out on the Tomorrowland site … and our main stage was essentially destroyed there, which is truly awful.
“That’s a stage that took years to build, with so much love and passion. So I think a lot of people are devastated.”
Spokesperson Debby Wilmsen told reporters ‘a lot of people are devastated’
Despite the fire, Tomorrowland organisers said they were still expecting 38,000 festivalgoers at DreamVille, the event’s campsite.
Israel has shown little respect for international borders since becoming the unrivalled military hegemon of the Middle East. Today that meant an Israeli airstrike on a government building in Damascus.
Israel says its attack on a Syrian defence ministry facility was intended as a warning to the new government: stay out of the part of southern Syria we have occupied or else.
Israel has moved into parts of the south of the country, built military bases and declared a line of control.
Smoke rises from an Israeli airstrike that hit the Syrian Defence Ministry in Damascus. Pic: AP
On Monday, Syrian tanks heading south to try and restore order following an outbreak of factional fighting were attacked by Israeli warplanes.
“The presence of such vehicles in southern Syria could pose a threat to Israel,” stated the Israel Defence Forces.
In reality, Syria’s ageing tanks pose minimal threat to Israel’s state-of-the art military.
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Syrian presenter interrupted by Israeli airstrike
The Syrian armour was attacked as it entered the area around Sweida in the Druze heartland of southern Syria following factional fighting there.
The flare-up reportedly began with clashes between Bedouin and Druze groups that ended in scores killed.
The background to the escalation is complicated.
At least three Druze militia groups are divided in their loyalties to different religious leaders and differ over how they should respond to calls to assimilate into the new post-revolutionary Syria.
Druze from Syria and Israel protest on the Israeli-Syrian border.
Pic: AP
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Israel is becoming more and more involved in Syria’s internecine war and says it will remain there indefinitely “to protect our communities and thwart any threat”.
Its critics say Israel is operating a policy of divide and rule in Syria, weakening the fledgling government and creating a buffer zone to protect the border with the Golan Heights – originally Syrian territory that it has occupied and annexed for almost half a century.
Since the fall of the Assad regime, Israel has used airstrikes to destroy of much of Syria’s military capability weakening its ability to impose control on outlying regions. This makes it more not less likely Israel will have a volatile unstable state on its northern border.
Syrian security forces walk along a street in the southern Druze city of Sweida. Pic: Reuters
America and European powers have chosen to normalise relations with the new government in Damascus and lift sanctions.
In contrast Israel has occupied its territory, bombed its military and today hit one of its government buildings in the capital with an airstrike.
Since its crushing military campaigns against Hamas, Hezbollah and Iran, Israel has emerged as the unchallenged military power of the region.
There is however a limit to what blunt force can achieve alone. It requires diplomacy to achieve lasting gains and Israel’s repeated assaults on multiple neighbours combined with its relentless campaign in Gaza are winning it few friends in the region.
Israeli airstrikes have targeted the Syrian military headquarters in Damascus amid renewed clashes in the country.
The gate of the Ministry of Defence in the Syrian capital was targeted by two warning missiles from an Israeli reconnaissance aircraft.
State-owned Elekhbariya TV said the Israeli strike had wounded two civilians, the Reuters news agency reported.
Smoke rises from Syria’s defence ministry building in Damascus. Pic: Reuters
It came as Israeli airstrikes targeted security and army vehicles in the southern city of Sweida, where the Druze faith is one of the major religious groups – marking the third consecutive day Israel has struck Syrian forces.
The Israeli military confirmed it had “struck the entrance gate” in Damascus – and that it would be monitoring “actions being taken against Druze civilians in southern Syria”.
The Israeli airstrike targeted Syria’s military headquarters. Pic: AP
Why Israel is getting involved in Syria’s internal fighting
Israel has shown little respect for international borders since becoming the unrivalled military hegemon of the Middle East. Today that meant an Israeli airstrike on a government building in Damascus.
Israel says its attack on a Syrian defence ministry facility was intended as a warning to the new government: stay out of the part of southern Syria we have occupied or else.
Israel has moved into parts of the south of the country, built military bases and declared a line of control.
On Monday, Syrian tanks heading south to try and restore order following an outbreak of factional fighting were attacked by Israeli warplanes.
“The presence of such vehicles in southern Syria could pose a threat to Israel,” stated the Israel Defence Forces.
In reality, Syria’s ageing tanks pose minimal threat to Israel’s state-of-the art military.
Local media said Sweida and nearby villages were coming under heavy artillery and mortar fire on Wednesday, according to Reuters.
The clashes marked the collapse of a ceasefire between Syrian government forces and Druze armed groups, with Israel also warning it would increase its involvement.
Syria said its forces had responded to being fired upon. Pic: Reuters
Israel said it was acting to protect the Druze groups through its attacks on convoys of Syrian forces.
Syria blamed militias in Sweida for violating a ceasefire agreement which had only been reached on Tuesday.
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A statement from its defence ministry said: “Military forces continue to respond to the source of fire inside the city of Sweida, while adhering to rules of engagement to protect residents, prevent harm, and ensure the safe return of those who left the city back to their homes.”
Israel’s defence minister Israel Katz said the military will continue to strike Syrian forces until they withdraw and should “leave Druze alone”, according to local reports.
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