In the continuing saga of big companies making excessive profits for doing nothing except increasing prices at a rate far beyond their cost base the the banks now join the party ….
This latest interest rate increase comes after the big four UK banks – Lloyds, Barclays, Natwest and HSBC – announced staggering collective profits of £28,930,000,000 (that’s £28.9 billion) for the first half of 2023. An 80% increase from the same time last year.
Banks are also set to receive tens of billions of pounds of public money in the next few years because of how the Bank of England remunerates central bank reserves at its base rate, which is currently rising. The OBR’s latest forecasts suggest that around £150bn of interest on reserves will be paid to banks in the next six years.
The big banks have earned these profits without having to lift a finger. They’re a direct result of the Bank of England’s relentless rate hikes that the banks have used as an excuse to raise borrowing rates at a significantly higher rate than they pay to savers.
This is NOT the banks fault, they are all companies whose main purpose is to deliver increased shareholder returns (in some cases some of those shareholders are the taxpayers) and they’re doing a great job of it! Surely it’s now time for the government to either ensure there is a competitive market place of regulate to stop companies driving inflation upward and reduce the impact on those in our society who are struggling to make ends meet?
Let us know what you think ….