What exactly is Libor?

Canary Wharf at night
Canary Wharf Credit: Yui Mok/PA

Libor - or the London Interbank Offered Rate - measures the rate at which banks borrow from each other.

Each day, a panel of banks set out what rates they think they can borrow from others over a range of periods - from overnight up to 12 months.

The data is collated, the top and bottom estimates are removed and the rest are then averaged to give a figure.

Libor is considered to be a key gauge of the financial system's health.

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