Britain’s most senior civil servant has been dragged into a row over setting the Libor as it emerged the Bank of England and former Labour government may have been involved in its manipulation.
Sir Jeremy Heywood, who is now the head of civil service and held senior positions in the last Labour government, is understood to have attended meetings where setting the rate was discussed.
Alistair Darling, who served as chancellor, is also likely to have attended some of the meetings although there is no suggestion of any wrongdoing.
Libor – the London Interbank Offered Rate – is the rate at which banks lend to each other, and is used to set millions of pounds’ worth of financial deals including car loans and mortgages.
It is also used in complex overseas financial transactions. Parliament is coming under pressure to investigate claims that the rate’s manipulation may have been sanctioned, which could lead to minutes of the private meetings being revealed.