Plans to increase deposit protection
The government plans to raise the maximum compensation for victims of bank failures to 50,000 pounds but banks will not have to pay money upfront into the deposit protection scheme, the Treasury said on Tuesday.
In a consultation document on reforming the banking system in the wake of last year’s run on mortgage lender Northern Rock, the Treasury concluded it would be wrong for banks to pay more money when they are rebuilding their capital positions.
Consumer inflation may top 4%
Rising food and energy prices could push UK consumer inflation above 4% this year, the governor of the Bank of England has warned.
He was speaking after the Office for National Statistics (ONS) said the Consumer Prices Index (CPI) rose by 3.3% in May, up from 3% in April.
This is the fastest rate since the CPI measure began in 1997, the ONS said.