Libor interest rate may have contributed to repossession levels

Fri, 06 Jul 2012

levels in the UK may have been exacerbated by the Libor interest rate fixing scandal, it has been suggested.

Housing minister Grant Shapps cited the episode as a possible contributory factor to high numbers of people seeing their homes taken into possession .

The comments come after Barclays was fined 290 million by regulators in the UK and the US for manipulating the rate, while numerous other banks may be punished for similar offences.

In answer to a question in the House of Commons from Labour MP Simon Danczuk, Mr Shapps said there may be a link between the debacle and home repossession figures.

He stated: "Research into homelessness proves that there are a lot of different causes, of which the Libor rate may have (been) a contributory factor."

The politician added this could be the case if it is found mortgage rates were adjusted as a result of the misdemeanours - however, he pointed out low interest rates have played an important part in helping numbers dip last year to the lowest level since 2007.

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