Lloyds and Halifax interest rates and rewards under threat after Santander 123 cut

The move, which came less than 24 hours after Santander halved the headline interest rate on its popular 123 account and follows the recent Bank of England base rate cut, will fuel speculation that other banks could follow suit and cut their rates and rewards as well.

Currently the Club Lloyds account pays a generous 4% interest on balances of between £4,000 and £5,000, making it one of the highest-paying current accounts on the market, while the popular Halifax Reward Current Account offers a £100 switching incentive and pays a £5 monthly reward as long as you pay in £750 each month, remain in credit and pay out at least two direct debits.

Bank of Scotland's current account pays 3% interest via its 'Vantage' add-on.

See our Best Bank Accounts guide for full info on all the top pick accounts.

'Changing market conditions'

In a statement issued today, a spokesperson for Lloyds Banking Group said: "Given changing market conditions, including the market expectation that interest rates will be lower for longer, we will be reviewing our current accounts in due course. 

"Any customers affected will be notified of changes in advance so they can take appropriate action if needed."

What are other banks doing?

We're now checking with all the major banks to see what plans, if any, they have to review their rates and rewards. So far this is what we've been told – we'll update this story as we hear more.

Will banks slash current account interest rates & rewards?