3 month LIBOR comes down to 3.99%

The actual 5 bp reduction was not significant albeit that normal daily reductions are about 3bp.

The significance of this move is bringing LIBOR below 4% and therefore the spread between LIBOR and Base Rate (BBR) below 100bp some 10 days before the MPC announcement on Thursday 4 December.

It seems almost certain that there will be a further cut in BBR in December - the debate is now whether that will be 0.5% or even a full 1%. This stems from the minutes of the MPC Meeting this month which show that they did consider a full 2% cut in November but only opted for 1.5% because they feared the nervous recation that this might have created. Since then the motor car industry in the UK has given dire warnings (the position in the US car sector is even worse) but conversely UK High Street retail figures for October were up 0.1% - there is already evidence of one or 2 day sales amongst the major brands....

And today sees the Chancellor at the dispatch box at 3.30pm unveiling his plans for fiscal stimulus......at 1.30pm the FTSE was up some 4.68%