Credit card companies given two weeks to cut rates
The government has today put the credit card industry on alert and suggested that if rates do not move in the next two weeks there will be more formal action by the government. This is a serious escalation in the fight between the government and the financial sector with many issues and future regulatory elements under discussion.
While the recent headlines have centred upon mortgage deals and the reluctance of many banks to instigate reductions in line with the UK base rates, slowly but surely the government has been building a case against the credit card companies. While the credit card companies may argue that increased default rates do not bode well for the future and they need to protect their income, more and more UK taxpayers are being pushed into financial difficulties by the ever increasing cost of finance.
Gordon Brown and Alistair Darling can not afford to get this particular issue wrong as the battle with the banks has rumbled on for many weeks and not cast the Treasury in a very good light. The credit card companies can probably expect a more direct and confrontational approach with the softly softly strategy used for the banking sector thrown out of the window.
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