Banks have been accused of being quick to hike costs for borrowers

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Banks have been accused of being quick to hike costs for borrowers while being slow to raise interest rates for customers to reflect the 0.25 percent rise announced a week ago. Just ten of more than 100 providers in the savings market have so far passed the increase onto all their customers by changing their products, according to moneyfacts.co.uk. Some have issued the full 0.25 rise while others have applied this onto a selection of their products. Rachel Springall, a finance expert from the site, said it would be “disappointing news for many savers” that they may not benefit from the full rate rise.

She said: “It is a real shame, and just demonstrates why savers should think about switching and not hold their breath for a rate rise on their account.” The interest rate rise came as a huge blow to millions of borrowers on variable rate deals. The quarter-point rise would add about £16 a month and £190 a year to the average mortgage. But the rise did offer some relief to savers who have seen their nest eggs decimated by above-target inflation and negligible returns.

The Bank of England interest rate hike has been met with fury by savers

Many homeowners are locked into fixed rate and as a result will not feel an impact from the rise immediately. And at 0.75 percent, rates are still low by historical standards. When the credit crisis and subsequent global financial crisis hit in August 2007, the bank’s base rate stood at 5 percent. The delay in benefits reaching savers, compared with the swift hikes in costs to borrowers, was criticised by the head of the influential Treasury Select Committee of MPs.