Interbank lending benefits from rates cuts

The rate cut of 100 basis points to 2% was the second in less than a month; the Bank previously slashed rates by 150bp on November 6.

Overnight sterling Libor plummeted from 3.01% on Monday to 2% this morning, while three-month sterling Libor fell from 3.88% to 3.38% over the same period. The repo rates on sterling also dropped yesterday from Monday's levels: overnight rates fell from 2.87% to 1.73%, and three-month rates from 1.84% to 1.6%.

The European Central Bank (ECB) also cut its key refinan