The United Kingdom's Financial Conduct Authority (FCA) published on Monday an action plan to ensure that banks and building societies are passing on interest rate rises to savers appropriately. The regulator said companies offering the lowest savings rates "will be required to justify by the end of August how those rates offer fair value" and vowed to take "robust action" against those who do not satisfy its criteria by the end of the year.
The FCA said that it found that interest rates on savings accounts have been rising but that this has been happening more slowly for easy-access accounts. It also concluded that smaller firms offer higher interest rates on average than larger ones. "We want a competitive cash savings market that delivers better deals for savers, where interest rates are reviewed quickly following base rate changes and firms prompt savers to switch to accounts paying higher rates," FCA Executive Director of Consumers and Competition Sheldon Mills said.