Saturday, May 17, 2008
Endless ramping yes but of interest rates!
The Libor rate has increased by 0.08% over the last two days. Now with all that money from the BoE you would expect it to drop. However, it appears the banks want 90,000,000,000 and not the 50,000,000,000 that the BoE offered! When Libor goes up so do our IR. I wonder if we will soon see mortgage IR rates calculated using the old rule of thumb formula i.e. IR = BoE rate + Inflation + Bank's Profit. This will be eye watering!