The average cost of overdrafts stands at an all time high – 18.9% which is the highest since the bank of England’s records began in 1995. It would seem that the bailed out banks like the Royal Bank of Scotland, are responsible for the highest charges.

The cost of personal loans is lower with an average rate of 13.1% and this is the highest since 2004.

This is further confirmation, as if any were really necessary, that customers are not seeing any benefit of the historically low Bank Rate which is standing at 0.5%. It is clear that whilst the banks are restricting the amount they lend, they are boosting their profits and balance sheets by pushing up charges on all their financial products.

This combination of record levels of interest and restricted supply of credit is set to choke economic activity in the UK and negate the affect of the £1.4 trillion of public money that the public injected into the UK banking system. And figures out this week show that recovery in the UK is lagging the USA and mainland Europe. The reason given for this is that financial services were a large proportion of the UK’s output and it is that sector that has been most badly affected by the recession.

This all suggests that if the UK’s recovery is to get going, the Government will have to tackle the availability of credit.