Campaigners protest rate rises & ballooning bank profits

August 3, 2023 

This morning we headed down to the Bank of England to protest their relentless interest rate rises – which are causing big bank profits to balloon – while millions of us suffer from the cost of living crisis. We’re demanding an end to rate hikes and for the government to introduce a windfall tax on banks’ excessive profits.  

Interest rates were hiked again today to 5.25%. This follows the news that the four biggest banks in the UK made nearly £30 billion in profit in the first half of this year alone. While rate rises are making the banks richer, they’re costing the public billions. So we made our way down to the Bank to get our voices heard and make a splash in The Guardian, Independent, and on LBC! 

Today members of the Bank of England’s Monetary Policy Committee (MPC) met to announce another rise in the UK’s base interest rate. This was the 14th rate hike in a row and marks a 15-year high, not seen since 2008. The financial crisis marks an important comparison for today as sadly the rules of the game haven’t changed. Millions of us are suffering while the big banks profit from an economic crisis.

This latest rate increase comes after the big four UK banks – Lloyds, Barclays, Natwest and HSBC – announced staggering collective profits of £28,930,000,000 for the first half of 2023. An 80% increase from the same period last year, and nearly 725% more than in 2020, these profits are a direct result of the Bank of England’s relentless rate hikes. 

A windfall tax on banks, similar to the one used by Margaret Thatcher in the 1980s; would bring a chunk of these profits back into public hands. Raising the existing bank surcharge from 3% to 35% (in line with the energy windfall tax) could raise at least £20 billion. Money that could be used to support households struggling to make ends meet, fund more social housing, free school meals, or public sector pay rises – all things this government says we can’t afford. 

We launched our people-powered campaign calling on Chancellor Jeremy Hunt to introduce a windfall tax on banks earlier this year, which Ex-Bank of England Deputy Governor Charlie Bean has also encouraged. And momentum for a windfall tax on banks is now growing. Angela Eagle, Diane Abbott and Clive Lewis are among the latest MPs to publicly call for its introduction over the last few weeks and we’ve been making our case in the press too. Our Co-Chief Executive Fran Boait appeared on BBC News and Head of Campaigns Hannah Dewhirst on Good Morning Britain, earlier today.

This morning @franboait told @BBCNews that interest rates have:

1️⃣ Eroded households' income
2️⃣ Boosted bank profits by 80%
3️⃣ Not even tamed inflation, because they're the wrong tool for the job

You can join our call for a windfall tax on banks here ➡️ https://t.co/RiYugO2fD6 pic.twitter.com/aIBIAO70jO

— Positive Money (@PositiveMoneyUK) August 3, 2023

Rate rises? No thanks.

It's time to: tax the banks!@HanKD667 told @GMB how the Big Four banks made almost £30 billion in profit for the first half of this year.

That's an 80% increase on the same period last year & a 723% increase on 2020.

Higher interest rates did that. pic.twitter.com/SY0A3QIcun

— Positive Money (@PositiveMoneyUK) August 3, 2023

Soaring interest rates cost the public purse billions too. Since 2006 the Bank of England has paid interest on the private banks’ reserves it holds. Recent interest rate hikes mean the Bank is expected to pay around £75 billion in interest to private banks over 2023 and 2024 – a cost which is ultimately borne by the Treasury, who agreed to cover any losses the Bank makes. Yet more billions which the big banks earn without having to lift a finger.

There is no silver bullet to fight inflation but our public institutions shouldn’t be making this worse by responding with the wrong tools which hit the most vulnerable the hardest. Opposition to rate hikes is growing, with the TUC urging the Bank of England to halt rate hikes just yesterday. Today’s latest rise, on top of the half-yearly profit announcements from the UK’s biggest banks, are just the latest piece of proof we need. It’s time for the Bank of England to pause interest rate hikes, and for this government to distribute the pain of this crisis more fairly; it’s time to #TaxTheBanks. 

If you haven’t yet, add your name to the petition to #TaxTheBanks to demand Jeremy Hunt introduce a windfall tax on banks’ excessive profits today.