Interest Rates

(asked on 1st June 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make it his policy to limit the interest rates charged by financial institutions; and if he will make a statement.


Answered by
John Glen Portrait
John Glen
Paymaster General and Minister for the Cabinet Office
This question was answered on 4th June 2020

HM Treasury has worked closely with the financial regulators and the major banks and building societies to provide relief to customers and businesses impacted by COVID-19.

In March, a three-month mortgage holiday was made available to customers, and 1.8 million mortgage payment holidays have been granted by lenders to date. The period in which borrowers can apply for a payment holiday has been extended, in line with the Coronavirus Job Retention Scheme, to 31 October 2020.

In April, the FCA also announced a series of temporary measures intended to provide emergency support for consumers who are facing temporary cash flow problems as a result of the COVID-19 outbreak. These measures included three-month payment freezes to credit cards and certain personal loans. On overdrafts, firms are required to provide a £500 interest-free buffer on main personal accounts and also to ensure that no customer is paying more than they were prior to the other recent overdraft pricing changes that came into force in April following an earlier FCA review.

For the Bounce Back Loan Scheme, an affordable flat interest rate after the first 12-month period has been agreed between the Government and lenders at 2.5%. This reflects the Government’s desire to balance a low price point for businesses with providing sufficient access to businesses through a range of banks. This will help ensure that UK businesses can access and benefit from these loans quickly and effectively.

All providers should stand ready and able to offer support to customers who are impacted directly or indirectly by COVID-19. We advise any customer who is concerned about their finances to contact their provider.

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