Libor rate falls to lowest level since 1986

Commenting on the Libor rate falling to its lowest level since 1986, Louise Cuming, head of mortgages at moneysupermarket.com said: "Banks and building societies are benefiting from the lowest borrowing rates for two decades but this isn't being passed on to consumers. Libor has fallen below one per cent yet all three key average mortgage rates (for two and three year fixed products and two-year tracker deals) have actually increased in the past week alone. In the past four months (since the Base Rate fell to 0.5 per cent) we have seen a growing disparity between mortgage rates and Libor, with the difference widening from 3.6 per cent in March to 4.3 per cent today.

"Our figures prove that Libor and Bank of England Base Rate are both completely divorced from mortgage rates. To add insult to injury the average mortgage rates have reached their highest level since the Base Rate initially hit 0.5 per cent in March this year."