Synchronisation and staggering of interest rate change by UK financial services firms

john k. Ashton ()

International Review of Applied Economics, 2009, vol. 23, issue 1, pages 55-69

Abstract: This study examines the frequency and form of deposit account interest rate change. Specifically the question of whether deposit interest rate change is synchronised with other banks or staggered at periodic intervals is addressed. Overall, evidence consistent with individual banks changing deposit interest rates in a staggered manner is recorded. Further larger banks are seen to change interest rates in a more synchronised manner than smaller banks. Lastly, when banks offer multiple deposit accounts, these products' interest rates are generally changed simultaneously by individual banks. These findings extend the current understanding of deposit interest rate change, and indicate that UK deposit interest rate setting is relatively rigid.

Keywords: retail banking; interest rates; staggering; synchronisation (search for similar items in EconPapers)
Date: 2009

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International Review of Applied Economics is edited by Malcolm Sawyer, Philip Arestis, Keith Cowling and Ron Smith

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