A rate cut won't help that much

The Council of Mortgage Lenders is on its knees in front of the Old Lady of Threadneedle Street begging for an interest rate cut. It says this will help ease the funding pressures of its mortgage lending members - the rational being if interest rates drop the money on offer in the markets will be cheaper. This strikes me as a little naïve since the interbank lending rate (LIBOR) is pretty much a law unto itself at the moment. Were you take look at the British Bankers' Association website's spreadsheet which details LIBOR levels (which I strenuously recommend you don’t) then you'd see the 2 month lending rate is almost 6.6% and the 3 month version is 6.5%. I'll wager it's going to stay that way - if not get higher - as banks wait for the flotsam and jetsam of the credit crisis to all float out of the world's financial institutions. A cut in interest rates isn’t going to do much to change that. Anyway as we all know a real Lady won't give out no matter how much you beg.