UK banks have ‘enough cash’ to survive another economic crisis

UK BANKS have more than enough cash to survive another economic crisis, the Bank of England’s latest stress test shows.

The exercise to assess the financial system’s resilience showed that the eight biggest lenders have sufficient funds to ride out turmoil.

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The test — for Barclays, Lloyds, HSBC, NatWest, Santander UK, Standard Chartered, Nationwide and Virgin Money — assumed a jump in unemployment to 8.5 per cent, a 31 per cent fall in house prices and the economy contracting by 5 per cent.

But the test’s worst-case scenario included interest rates of just 6 per cent — even though financial experts believe they will rise above that from the current 5 per cent.

NatWest chief exec Alison Rose said: “The good news is that we all passed. It might sound like a technical exercise, but this really matters.

“It means the central bank is confident we’re set up to deal with an extreme economic shock, keeping our customers’ money safe and continuing to lend.

“The 2008 crisis taught us what happens if banks are not prepared.”

Bank of England governor Andrew Bailey said UK banks were much stronger than in the last financial crisis.

He added that problems which had affected smaller regional US institutions, such as Silicon Valley Bank, were unlikely to be seen here.

But he urged lenders to pay more interest on savings, saying: “It’s important that rates get passed through and that banks compete on savings rates.”

Banks’ easy-access savings rates have come under fire from MPs.

Typical interest rates of 0.7 per cent to 1.35 per cent are well below the Bank base rate of 5 per cent.

However, Mr Bailey acknowledged that banks can’t use customer deposits for their capital requirements.

Banking experts say a decade of low interest rates has eroded saving habits. One in four Brits has less than £100 in savings accounts.

Analysis by Alison Rose

THE BANK OF ENGLAND has said that UK banks are strong enough to cope with even the worst-case scenario. But that’s not the case for many of our customers.

Half of the population said they couldn’t cope with a large financial shock such as the boiler breaking or an emergency car repair.

And one in four have less than £100 in their savings. For us alone, that’s 3.6million customers.

After 15 years of low interest rates, many are facing rapid rises for the first time.

NatWest has recently launched a digital savings account with a 6 per cent interest rate to encourage people to put aside as little as £25 a month.

I realise that taking a first step towards saving or asking for help can feel impossible when so many are simply trying to make ends meet.

That is why we have set a new commitment to support ten million people with their financial wellbeing — whether that’s completing a free financial health check, or rounding up your change into a savings account.

A recent customer used our benefits calculator and found she was entitled to an extra £1,600 a month. This week we hit the milestone of helping two million people save £100 for the first time.

We know it can feel overwhelming or frightening to talk about money problems. But you don’t need to come into a branch. We have specialists available online and on the phone.

Asking for help does not impact your credit score. It’s the first step in you taking control, not us.

22 more Spoons for sale

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WETHERSPOONS has put another 22 of its pubs up for sale — after offloading 28 others in the past year.

However, boss Tim Martin said it was a “misinterpretation” to class the sales as a “money-raising exercise”.

The group — which is conducting an overhaul of its estate — says “almost all” the pubs it has put up for offer had another Wetherspoon nearby.

The 28 previous sales raised £6.5million for the chain — which has 827 pubs across the UK and Ireland.

Meanwhile, more people are flocking to its pubs for cheaper pints and food.

Wetherspoons announced that sales in the past ten weeks were 11 per cent higher than pre-pandemic levels.

Chairman Mr Martin said that he expected Wetherspoons’ profits to increase as energy costs and inflationary pressures on the business started to ease.

Hot shoe shuffle

SHOPPERS are flocking to Shoe Zone for cheaper summer sandals, prompting the retailer to cheer “exceptional” sales.

It yesterday said that its sales volumes had risen by “double digits”, as more customers hunted for bargains on the high street.

The company said better-than-expected sales and falling shipping costs mean higher profits of at least £13.5million.

Shares in Shoe Zone went up 7 per cent, or 17.50p, closing at 252.5p.

C4 not scared to profit

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CHANNEL 4 says it spent a record £713million investing in British TV and film content last year, despite axing a number of its projects to save cash after the pandemic.

After fending off privatisation, C4 — with hits such as Danny Dyer reality show Scared Of The Dark — had a pre-tax surplus of £20million, resulting in bigger bonuses for bosses.

Chief exec Alex Mahon collected £1.5million in total pay, the highest award in C4’s 40-year history.

Ms Mahon said: “With our financial sustainability and ownership status no longer in question, we are doubling down on what we were created for: to deliver the best and broadest range of programmes that reflect British lives.”

This post first appeared on thesun.co.uk