Santander takeover of A&L

Commenting on Santander's £1.26bn takeover of Alliance & Leicester, Kevin Mountford, head of current accounts at moneysupermarket.com, said: "While City types may be breathing a sigh of relief at the creation of a new powerhouse in UK banking, the proposed deal may not be such good news for consumers.

"Abbey and Alliance & Leicester have similar structures, making a merger desirable, but they have both been key players in driving competition. We have often seen them head to head in the savings and current account markets, ensuring that customers had some excellent options to choose from. The question now is whether this competition will be neutered.

"A&L, in particular, has long been regarded as the 'terrier' of the financial services industry, proving a real threat to the established Big Four by offering market-leading current accounts and very attractive savings options.

"This news also increases the likelihood of other smaller innovators being swallowed up by big institutions, potentially damaging competition further."