Bank customers are being hit with greater charges for going into the red despite the Bank of England cutting its base rate by 2.75% over the past 12 months, it has emerged.

Financial information group Moneyfacts.co.uk said that many banks are now charging customers more for going into an authorised overdraft, with some lenders having hiked charges by up to 7% over the past year.

Customers with Clydesdale Bank and Yorkshire Bank have seen the biggest hikes, with the providers - which are both part of National Australia Bank Group - increasing authorised overdraft rates by 7.31% since November last year to 16.95% on their current account plus.

Abbey has raised overdraft rates by 3% on one of its current accounts, although it still offers a 0% deal, while Nationwide has also raised its rate by 3% to 12.9% and Smile has hiked its rate by 4%.

Barclays, HSBC and first direct also increased the interest they charge people who go into the red.

But Moneyfacts said that, while overdraft rates had been increased, none of the major providers had reduced the interest they paid to people who were in credit by the full 2.75%.

Andrew Hagger, of Moneyfacts.co.uk, said: "Whilst the reports of higher overdraft interest rates represent another kick in the teeth for hard-pressed consumers, the situation needs to be put into perspective.

"If you have a current account permanently overdrawn by £500, you will pay interest charges of £85 over the course of a year based upon an interest rate of 17% APR. An increase of 2% will increase the annual cost by just £10.

"So whilst rate increases are unwelcome, consumers need to understand what it means for them in terms of pounds and pence, before panicking and cancelling their overdraft facility and then incurring far higher costs as a result."

The major high street banks are currently engaged in a High Court test case to establish whether their unauthorised overdraft charges are fair.

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