I just saw this story in the Times.. I would like to say more, but I am rather busy right now. Perhaps, others might like to take up the story with some comments. (Asteve, Nick, Vado, traderboy, I am thinking of you here).
Britons are facing more months of rising mortgage costs after the rate at which banks lend to each other unexpectedly spiked and lenders rushed to borrow £78.3 billion from the Bank of England, which had £13.7 billion on offer.
The three-month London inter bank offer rate (Libor), which is the cost of borrowing in the wholesale funding market, rose from 5.70 per cent to 5.84 per cent as banks reacted to yesterday's Bank of England quarterly Inflation Report that ruled out more interest rate cuts to curb inflation which now 3 per cent - above the Government's 2 per cent target.
Libor is now nearly a whole percentage point above the 5 per cent base rate, and today's surge sent sterling down against the dollar from $1.9446 to $1.9438.
Inflation going up, market interest rates rising, I am shocked!!