Barclays is to pay millions in compensation for recent IT outages which prevented customers from banking.

The lender said it expects to pay between £5m and £7.5m in compensation to customers for “inconvenience or distress” caused by a payday outage last month, the influential Treasury Committee of MPs said.

The glitch began at the end of January and lasted several days.

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This was caused by “severe degradation” in the performance of their mainframe computer, a large computer used by big organisations for bulk data processing.

It resulted in the failure of 56% of Barclays’s online payments.

Up to £12.5m, however, could be paid when all outages over the last two years from January 2023 and February 2025 are factored in, the committee said.

It would be by far the biggest amount of compensation paid by a firm in the last two years. Irish bank Bank of Ireland would be the second having issued £350,000 in compensation.

The committee is investigating IT problems at all banks that prevent or limit customer access.

Why does this keep happening?

As part of their inquiries, banks said common reasons for IT failures included problems with third-party suppliers, disruption caused by systems changes and internal software malfunctions.

The responses were received before last Friday’s online banking failures which caused difficulties for millions on payday but the committee said it would request data on the latest disruption.

A recurring problem

The nine top banks written to by the Treasury Committee accumulated 803 hours of unplanned outages, they said, equivalent to 33 days.

These hours were comprised of 158 individual IT failures. Barclays’ payday failure is not captured in the numbers.

As a result, the bank with the longest outages was NatWest with 194 hours of failures.

Donald Trump is to exclude carmakers across North America from the pain of US tariffs levelled against Mexico and Canada, following apparent pressure from motor bosses.

The White House confirmed the concession was made after the president spoke to the bosses of Ford, General Motors and Stellantis in a call on Wednesday.

Each company has manufacturing operations and suppliers in Canada and Mexico.

There will be a tariff exemption of at least a month on vehicles made across the continent but only if a previous agreement on so-called ‘rules of origin’ is implemented in full.

It governs where a product is first sourced and where a tariff may apply during transit across borders.

“Reciprocal” tariffs are still planned from April, the president’s spokesman said.

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Manufacturers have complained of being worst affected by the imposition of 25% tariffs against both Canada and Mexico since Tuesday because flows of parts between the three countries can be hit by tariffs multiple times.

The complicated nature of their operations can mean a single component crosses a border more than once during the production process.

Such a big spike in costs from tariffs poses a big risk to sales as customers are asked to pay more to help compensate for the sanctions.

Automakers’ share prices have been among the worst hit since Mr Trump took office again in January.

The car bosses, according to Reuters news agency sources, pledged additional US investment but wanted clarity on tariffs ahead.

Mr Trump urged them to shift their operations to the United States, according to a White House statement.

The tariff concession marked the first compromise on the trade issue since the president signalled, on Tuesday, that there would be no U-turns and only more tariffs after Canada said it would respond in kind.

There have been growing signs this week that corporate America is uneasy, at best, with the tariff policy against both Mexico and Canada

Those US neighbours, along with China, which is facing 20% tariffs, are the country’s three biggest trading partners.

The imposition of tariffs on all goods has been received badly by financial market investors, worried that US profitability is at risk.

One closely-watched forecast for US growth suggested that the threat of tariffs since Mr Trump’s election victory was confirmed had hammered activity and plunged the country into recession.

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There are mounting reports of boycotts against US goods in Mexico and Canada.

The nerves were publicly admitted by the boss of Jack Daniel’s maker Brown Forman, Lawson Whiting, on Wednesday when he described Canadian provinces taking American-made alcohol off shop shelves as “worse than a tariff”.

US stock market values are sharply down since the inauguration and the dollar has lost more than three cents against rivals including the euro and the pound just this week amid the tariff turmoil.

Such is the growing investor concern for the health of the US economy, the tariff implications have been partly blamed for a steep fall in oil prices.

Brent crude was trading at $68 a barrel earlier on Wednesday – its lowest level for more than three years.

Several billion pounds in spending cuts – including from the welfare budget – are expected in the spring statement later this month.

The Treasury will put forward the proposed cuts to the Office of Budget Responsibility (OBR) on Wednesday, ahead of it providing a financial forecast on 26 March, alongside Chancellor Rachel Reeves announcing her spring statement.

Sky’s deputy political editor Sam Coates revealed on the Politics at Jack and Sam’s podcast that welfare cuts are set to be part of the spring statement package to help the chancellor come within her borrowing limit.

Coates said there would be a “four-point plan” involving planning reform, Whitehall cuts, regulation cuts and welfare cuts.

Ms Reeves is running out of her £9.9bn headroom after months of economic downturn and geopolitical events since last October’s budget.

Her self-imposed fiscal rules mean she cannot borrow for day-to-day spending, leaving spending cuts as one of her only options.

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Over the weekend, Sir Keir Starmer said the government was in the “early stages” of looking at whether tax rises or spending cuts were needed to meet Labour’s self-imposed fiscal rules.

The prime minister refused to say whether further tax rises or spending cuts would be imposed.

The OBR is required to produce two economic forecasts a year, but the chancellor said she would only give one budget a year to provide stability and certainty on upcoming tax changes.

However, the poor economic climate since October is forcing her hand, with inflation rising to its highest level in 10 months to 3%, a sharp rise in government bond yields and growth has not been as high as expected.

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Donald Trump imposed tariffs on Canada, Mexico and China – the US’ biggest trading partners – this week, prompting promises of retaliation and a stock markets to fall sharply across the world on Tuesday.

The UK has not been hit by tariffs yet, but the chancellor said the British economy will still be hit by the US president’s trade war even if the UK strikes a deal with the White House.

“It’s absolutely the case that even if tariffs aren’t applied to the UK we will be affected by slowing global trade, by slower GDP growth and by higher inflation than otherwise would be the case,” she told hundreds of top British manufacturers at a key industry conference.