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Bank margins at record levels

Bank margins at record levels

Category: Banking

Updated: 30/06/2017
First Published: 21/07/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
In a week when Vince Cable has blasted the UK's banks for ripping off customers, research conducted by has found that bank margins are at record levels.

Lenders have made a concerted effort to cut the rates on fixed rate mortgages in an attempt to prise borrowers from record low variable deals.

Recent figures from showed that consumers are currently enjoying the lowest rates seen in seven years.

However, rates on unsecured lending continue to rise, with lenders taking record margins. Currently, the average rate of interest charged on personal loans is 12.6%, meaning the margin it sits over the base rate of interest is 12.1% - an all time high.

The same is true for credit cards which, charging an average interest rate of 18.8%, sit 18.3% above the Bank of England's measure.

The margin between authorised overdraft rates and the base rate is also at a record high, with borrowers paying an average rate of 14.24%.

"Despite the UK economy moving out of recession, a number of market indicators and sentiments remain subdued for unsecured lending," said Michelle Slade, spokesperson for

"Customers successfully applying for unsecured credit are paying a heavy price as the increased risk is passed on through increased margins.

"Until banks and building societies repair their balance sheets, it's highly likely these increased margins are here to stay

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