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Libor drops below 1%

Three month Sterling Libor rates have dropped down below 1 per cent for the first time in history.

Three month Sterling rates have been slowly reducing since the Bank of England dropped base rate down to 0.5 per cent, but have only today got within 0.5 per cent of base rate, to 0.99 per cent.

Three month Libor rates began in January 1986, and have never gone below 1 per cent.

In light of falling Libor and swap rates, critics have hit out at mortgage lenders for recently increasing rates. But the Council of Mortgage Lenders defended its members yesterday, arguing that increased regulation, arrears management and capital requirements have made it impossible to reduce new mortgage rates.

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