The Competition Commission has announced that it is to lift the pricing controls it imposed on the UK's four biggest providers of banking services to small and medium-sized businesses.
The measures, which were brought into effect just four years ago, required HSBC, Royal Bank of Scotland, Barclays and Lloyds TSB to offer small business customers an account with either an interest rate of at least 2.5 percentage points below the base rate or charge-free money transmission facilities.
However, now that other banks, such as HBOS and the Alliance & Leicester have entered the small business banking sector, the Competition Commission believes that the market is competitive enough to survive without regulations.
While small business representatives have expressed dismay at the developments, the Office of Fair Trading has welcomed the decision, claiming that it will in fact benefit UK SMEs.
John Fingleton, chief executive of the OFT, said: "This is an important step in the development of further competition in the business banking sector. It will allow banks greater freedom to innovate and compete for customers, and will be most beneficial for those prepared to consider switching their banking service provider."