From The BBC:
The British Bankers Association has defended the rise in the cost of borrowing – despite the base rate remaining at a record low.Financial website Moneyfacts claimed mortgage profits had increased nearly fourfold in recent months, with typical fixed-rate deals also going up. But banks are facing “substantially” higher costs, the association’s chief executive, Angela Knight, insisted. And they had been “instructed” to put far more money in reserve, she said. In the UK, banks were “holding twice the amount of the worldwide average”, Ms Knight added. “You can’t hold it and lend it at the same time.” ‘Far less’ cashMoneyfacts described lenders’ potential profit margins as being the largest it had seen since it began keeping records in 1988. For a bank, the margin is the difference between the cost of borrowing money and the amount it charges people to have a mortgage.
“Typically we would have seen a 0.8% margin on top of their product,” said Michelle Slade from the website. “Now we are se…
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