Ananova:

The confidence of the banks to lend to each other remains shakey amid world financial turmoil.

The three-month lending Libor rates - a key measure in pricing mortgages - has risen again to 6.285%, nearly 2% above base rate.

And the overnight lending rates between banks also jumped 0.4% to 5.81% - more than 1% above the Bank of England's official 4.5% base rate.

The Government this week unveiled a huge £400bn package to restore confidence in the banking sector, including £50bn made available to strengthen their finances.

But the measures have had no immediate impact on easing the strains in money markets.

The rate at which banks lend to each other has remained high in the longer term despite a fall in the immediate rate.

The combined impact of the coordinated rate cuts and extensive central bank liquidity injections should put a cap on rates.

The once-a-day Libor fix is an indicative rate and not necessarily the rates at which banks actually lend to each other.

But, it is a global reference point for trillions of dollars of contracts for financial, corporate and household borrowing.