Financial services group Abbey National has created 500 new jobs with the launch of a current account war with its big High Street rivals.

The former building society said it was pouring £25 million into its retail banking arm in a bid to increase its current account customers.

It was increasing the interest paid on current accounts from 0.1 per cent to three per cent in a bid to tempt consumers from the Big Four banks.

The group said this was the highest rate currently on offer and would encourage people to move their accounts from rivals.