FSB issues warning over bank charging plans

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FSB issues warning over bank charging plans (image credit: iStock/nathanaparise)

The Federation of Small Businesses (FSB) has responded to the latest announcement from NatWest and Royal Bank of Scotland (RBS) that the banks may begin to charge their clients for holding deposits on their accounts in the coming months.

FSB national chairman Mike Cherry stated he is "deeply concerned" by the proposals, as they represent a further cost to UK businesses, many of which are already struggling in a more chastened fiscal landscape in the wake of the EU referendum.

"Today's warning from Natwest and RBS will be deeply concerning to small firms. FSB's latest research shows small business confidence is already at a four-year low," he argued. "Firms are less optimistic, cutting headcount and curbing investment intentions."

Mr Cherry went on to add that despite the banks claiming the move would need to take place as a result of the ongoing low interest rate environment in the UK, the Bank of England's Monetary Policy Committee (MPC) must tread carefully in the months ahead before making any amendment to the UK's base rate of interest.

He argued that the members of the MPC must first consider the impact this could have in both the wider business sense, as well as for smaller companies in particular.

"It is now vital that all finance providers holding deposits from small businesses do everything they can to update customers concerned about any changes to their Business Current Account during this uncertain economic period," the FSB chief concluded.