Spectre of more expensive mortgages after downgrade

saying: “I can’t access money paid into NatWest today due to tech problem. My daughter may lose her school club place if I don’t pay. Sort it out!”

Bob Spearman, from Petworth, West Sussex, said that his tax credit payment had not been paid into his NatWest account.

“We live from week to week and the child tax credit weekly payment is a lifeline on which we rely,” he said.

A spokeswoman for UK Payments Administration, which oversees payments, said the problem was not a central one and therefore it did not appear to have affected other banks.

But people expecting payments from people or businesses that bank with NatWest and RBS could encounter delays due to the technical issues at their end, she said.

In recent

years,

customer satisfaction polls have shown that issues with online banking were the fastest-growing problems, with many customers saying they had to contact their banks more than once for them to be resolved.

According to the independent Financial ombudsman Service, the banks must refund any charges incurred as a result of the error. It says anyone charged as a result of the problem is entitled to their money back as, where the bank is at fault, it must return customers to the position they would be in without the error.

Clare Francis, editor of MoneySupermarket.com, said: “What’s particularly hard about this glitch is that it has happened on a Thursday and that’s when a lot of benefits get paid in, so in some respects it’s the worst day of the week it could happen.” The ratings agency Moody’s last night lowered the credit ratings of RBS, Barclays and hSBC banks, raising the spectre of increased costs for consumers.

They were among 15 banks and f inancial institutions who had their ratings downgraded by the agency, who said the lenders’ long-term prospects for profitability and growth were shrinking. Moody’s said that it was especially concerned about banks with signif icant capital market activities – heavy trading involvement in wholesale money markets.

“All of the banks affected by today’s actions have signif icant exposure to the volatility and risk of outsized losses inherent to capital markets activities,” Moody’s global banking managing director Greg Bauer said in the agency’s statement last night.

The other institutions that have been downgraded include Credit Suisse, UBS, BNP Paribas, Credit Agricole, Societe Generale, Deutsche Bank, Royal Bank of Canada, Bank of America and Morgan Stanley.

RBS saw its rating cut from A3 to Baa1, Barclays from A1 to A3 and hSBC from Aa2 to Aa3. The biggest surprise is the threenotch downgrade of Credit Suisse.

Some of the banks were put on negative outlook, which is a warning that they could be downgraded again later, on the basis that governments may eventually withdraw their support. Moody’s recognised “the clear intent of governments around the world to reduce support for creditors”, but said they had not yet put frameworks in place that would allow them to let banks fail.

A downgrade usually means that it becomes more costly for banks to raise money by selling debt, and that investors demand higher interest for riskier debt, which is what the downgrades represent.

The impact on consumers could be more expensive mortgages.

however, it is believed that British banks are comparatively well placed to weather the worst effects of the downgrade on account of the steps already taken to reinforce their balance sheets as a result of the f inancial crisis of 2008.

Moody’s has already downgraded major banks in several european countries.