Citigroup analysts criticised the Government's expansion of National Savings and Investments (NS&I) and said that it should instead be looking to reduce the size of the scheme and raise funds through the sale of gilts.
"While the new national savings index-linked certificates appear highly popular with many investors, we believe they are a bad idea for the government: they are likely to prove a highly expensive form of funding and will hinder the important task of reducing the UK banking sector's reliance on wholesale funding," said Citigroup.
The five-year certificates offer a rate of interest equivalent to 0.5pc over the retail price index, giving a yield of about 90 basis points over that of gilts of the same maturity.
The bankers want to pay us peanuts in interest on our accounts and anyone that offers a half decent return is beyond the pale.
The only consolation is that this ill-judged outburst will only confirm the value of NS&I's certificates and thus encourage take-up.