Protestors called for an end to inequality caused by interest rate rises
London, 21 August 2023 – A demonstration was held this morning outside the Bank of England, to highlight the inequality caused by interest rates whilst the Bank debated whether to raise them again today. Participants celebrated as the Bank decided to press pause and break its hiking streak.
Protesters dressed as Bank of England governor Andrew Bailey and Rishi Sunak handed “cash” to “bankers” sporting the colours of the UK’s big four banks: HSBC, Lloyds Bank, Barclays and NatWest.
They said this was to symbolise the public money the Bank of England will pay banks in interest on the risk-free reserve accounts they hold with it, estimated to reach £42 billion this year.
Since the Treasury ultimately covers these costs, protest organisers Positive Money and The Equality Trust said this handout to banks was money that could be better spent on improving public services and raising the pay of those who work in them.
The focus of the protest was to call out the unequal impacts of interest rate rises, which have seen the profits of the big four UK banks swell to almost £30 billion for the first half of this year – an 80% increase on the same period last year – whilst housing costs for families have soared.
Organisers also argued that raising interest rates has done little to bring down inflation, because it is being largely driven by supply-side factors like international fossil fuel prices, which our domestic monetary policy cannot control.
This follows YouGov polling released by Positive Money today, which finds that only 12% of UK adults oppose a windfall tax on banks, whereas 58% are in support.
Hannah Dewhirst, head of campaigns at Positive Money, said:
“We came out today to tell the Bank of England that we’ve had enough of senseless interest rate rises, and we’re delighted they’ve finally listened to the public.
“Rate rises are failing to bring down inflation fuelled by international fossil fuel prices and food prices disrupted by war and environmental breakdown. They will only continue to impoverish households and enrich banks.
“What we need are better tools for dealing with inflation than blunt instruments like interest rates, and a windfall tax on bank profits to redress the harm done to workers and families by rate hikes.”
Priya Sahni-Nicholas, Co-Executive Director at The Equality Trust, said:
“We’ve all seen first hand the huge damage interest rate rises have inflicted onto families who are left struggling to afford food or pay their bills. So we’re delighted that our voices helped convince the Bank of England not to inflict more today. But make no mistake – this doesn’t make up for the harm they’ve already done.
“Our system and policy choices are failing everyday Brits. Banks, supermarkets, and energy firms have taken obscene profits, while widespread below inflation pay-increases have left workers taking out loans to pay for everyday essentials.
“We need to take a long hard look at why our economic policies consistently bolster the riches of the already-wealthy and hurting those grappling with the rising cost of living. The only way out of crisis is to reduce, not grow, the gap between us and the richest. Change is possible; a windfall tax on banks would start to build a stronger, stabler, and more equal economy.”
About the organisers:
Positive Money is a research and campaign organisation working towards a money and banking system which supports a fair, democratic and sustainable economy.
The Equality Trust is a UK registered charity that campaigns against economic and social inequality.
Photos from this morning’s demonstration outside the Bank of England can be found here: https://drive.google.com/drive/folders/11IgcXaQFfklb_P-ebdds3BPV67c54sbF
Positive Money has provided options for how this windfall can be taxed: http://positivemoney.org/wp-content/uploads/Options-for-a-windfall-tax-on-banks-1.pdf
Positive Money has been petitioning for Jeremy Hunt to tax the banks since February: https://actionnetwork.org/petitions/tell-hunt-to-tax-the-banks/
HSBC’s Q2 profit announcement can be found here: https://www.hsbc.com/investors/results-and-announcements
NatWest’s Q2 profit announcement can be found here: https://investors.natwestgroup.com/results-centre.aspx
Barclays’ Q2 profit announcement can be found here: https://home.barclays/investor-relations/reports-and-events/results/barclays-h1-2023-results/
Lloyds Bank’s Q2 profit announcement can be found here: https://www.lloydsbankinggroup.com/investors.html