BoE's interest rate cut toothless in face of mortgage crisis

The credit crunch is now at its most severe since December, when the three month London inter-bank offered rate - the banks' cost of funding - was about 120 basis points above base rate.
Traders said they expect Libor to set today at 5.92375pc, 90 points above base and down just 2.75 basis points on yesterday.
Yesterday, the Bank confirmed it cut rates because "credit conditions have tightened and the availability of credit appears to be worsening". It also warned that "the disruption in financial markets could lead to a slowdown in the economy".