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Friday 8 December 2023 Dublin: 9°C
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Interest Rates

'They got away with it for too long': Harris won't thank bankers for upping saving interest rates

Harris said the banks are ‘laggards’ in terms of the slow pace they passed on interest rate hikes to savers.

HIGHER EDUCATION MINISTER Simon Harris has said banks got away with not passing on higher interest rates to their savers for “far too long”. 

He slammed the banks for their slow pace to support their customers, standing over previous comments where he called the banks “laggards”. 

Speaking to reporters at Government Buildings this afternoon, the minister said he welcomed the move by Permanent TSB to up its interest rates on certain savings products.

The bank said today the changes, which will take effect from 26 September, will see its three-year fixed term deposit rate rise from 2% to 3%.

Earlier this week, Bank of Ireland announced a series of rate changes to its suite of deposit products.

“I welcome the fact that some banks have now finally decided to give people some of their own fair share from their own money, but don’t expect me to say thank you on behalf of the people that I represent,” he said, adding:

They got away with it for a long time and there are still some sectors of society ripping off the Irish people during the cost of living crisis, and I’ll never stop calling that out.

“I used the phrase laggards and, you know, maybe people thought it was an offensive term. It’s not. It is a statement of fact. It means to lag, to come last and it is an absolute statement of fact,” he added. 

Harris said a Financial Times report showed that Irish banks came last in terms of passing on the interest rates to their customers.

“They were quick enough to pass on other charges. I don’t buy the strawman arguments and I never will and quite frankly, the media shouldn’t either,” said Harris.

“The reality of the situation is that banks want to have a conversation about mortgage rates on one hand and interest rates in the other. That’s fine. There’s another leg of that stool. It’s called profit levels.

“And I believe in profit, profit is a good thing. Profit is very important in a capital society. But profit is meant to be based on ingenuity, it is meant to be based on hard work, it’s meant to be based on innovation, it is meant to be based on new products. It’s not meant to be based on just being in the right place at the right time when there’s an inflationary crisis, the worst since we’ve seen since perhaps the 1970s,” said Harris. 

Permanent TSB reported pre-tax profit levels of €26 million for the first half of 2023. 

Harris said he welcomed the fact that some banks are now moving to pass on some level of a rate increase to their savings products, acknowledging that there’s a correlation between mortgage interest rates and deposit interest rates.

“But it’s not the only factor. The other factor is the elephant in the room, which is a certain small number of sectors being able to profiteer during the cost of living crisis when my constituents are seeing the costs of things going up, are worried about it and government is working around the clock to try and help people ease that burden,” said the minister. 

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