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Libor rises for first time in three months
28.01.09
The interest rate at which banks lend to each other edged higher today for the first time since the Government bailed out the British banking system more than three months ago.
Three-month sterling Libor ticked up from 2.16938% to 2.17% — its first rise since the Treasury agreed to plough £37 billion into Royal Bank of Scotland, Lloyds TSB and HBOS on 13 October.
It was a stark reminder of how little the banks trust each other, and how far the credit crunch has to run. Philip Shaw of Investec said: “It is still on a downward trend but it is a timely reminder that at some point interest rates will bottom.”
