21Oct
Libor rate fall seen as sign of growing liquidity
The fall in the London interbank offered rate (Libor) - which
determines the cost of interbank lending - is showing signs of
responding to recent actions taken to improve liquidity, it has
been stated.
Darren Cook, a spokesman for finance website Moneyfacts.co.uk, said
the Libor rate has been coming down, although it is not yet "where
we should be", which he suggested was between five per cent and 5.5
per cent.
"But I think it is a good indication that there is some liquidity
coming back," he added.
Mr Cook said the key now was for lenders to start passing on these
falls to consumers, since they had used increases in Libor to
justify raising mortgage costs.
He concluded: "Hopefully we will see these margins reduce in the
short term."
The latest three-month Libor rate, which is jointly produced by the
British Bankers Association and Reuters, stands at 6.085 per cent,
compared with 6.16 per cent on October 17th.
