Interbank rates creep up in Europe

Money market tensions are showing signs of re-emergence, with interbank rates hitting levels not seen since mid-January for euro and sterling borrowing.

The London interbank offered rate (Libor), an indicator of market borrowing costs, for three-month euro loans crept up from 4.39% on Tuesday 4 March to 4.40% on Wednesday, the highest level since 18 January. The cost for three-month borrowing in sterling edged to 5.774% from 5.768%, the highest level since 7 January.

Both figures are well abo