In March, Treasury Select Committee chairman Andrew Tyrie wrote to the Financial Services Authority criticising it for failing to raise concerns about the Bank of Ireland’s decision to increase some mortgage interest rates and not assessing the impact on the mortgage market.

However, in a letter seen by the Financial Times, former FSA managing director and Financial Conduct Authority chief executive Martin Wheatley responded: “We currently have no plans to treat this as a prima facie case of mis-selling.

“We have reviewed the terms and conditions provided to us by the Bank of Ireland UK and did not identify any concerns which led us to believe the terms may be unfair.”

Last month a group of landlords announced they were preparing a class action against the bank on the basis that whilst there may be explicit terms in the mortgage document allowing the bank to increase the margin, this clause was inherently unfair.

The lawyer leading it, The Law Department founder Justin Selig, said Wheatley’s announcement made the class action more likely: “Every day I am getting probably about ten people contacting me which is building up to quite a large number.”