British Banks Cut Costs as Interest Rates Begin to Decline

The largest banks in the United Kingdom are reportedly cutting costs to protect profits as interest rates begin to decline.

The moves come as the Bank of England voted this week to cut rates for the first time in four years and signaled that there are more cuts on the way, Bloomberg reported Friday (Aug. 2).

Banks have told employees to forego business class and fly economy for trips of five hours or less, to seek forms of transportation other than taxi when going to meetings, and to arrange three meetings per day before booking a business trip, according to the report.

Standard Chartered has more than 200 programs in place to help it cap its annual expenses at $12 billion in 2026, per the report.

While there are likely to be job cuts at some of the biggest British banks, most of the banks aim to focus on property, infrastructure and other cost reductions that don’t involve headcount reductions, the report said.

It was reported in July that HSBC was slowing hiring and asking investment bankers to reduce expenses as part of an effort by CEO Noel Quinn to reduce costs in anticipation of interest rate cuts.

The banking giant stopped filling open positions, in some cases, and ordered some departments to stop hiring altogether.

It was also reported in July that Lloyds told staff to reduce their use of taxis and business class flights as part of the banking giant’s attempt to cut costs amid a $5 billion strategic overhaul.

“As we grow and expand our business … it’s important that we also keep a tight grip on our costs — particularly where our personal choices have a great impact,” Lloyds Chief Operating Officer Nick Laird wrote at the time in a memo sent to the bank’s corporate and institutional banking staff. “The clearest example of that is our travel which has both a financial and environmental cost.”

The Bank of England announced its bank rate reduction Thursday (Aug. 1), saying that its Monetary Policy Committee voted 5-4 to cut the bank rate by 0.25 percentage points, from 5.25% to 5%.

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