By Ambrose Evans-Pritchard
The Telegraph, London
Monday, December 3, 2007

http://www.telegraph.co.uk/money/mai...cnrates103.xml
The sterling interbank market has collapsed at the fastest rate in modern history, prompting pleas for immediate rate cuts from a chorus of top British economists.

Office for National Statistics data sourced to the Bank of England shows the volume of market loans in the banking system plunged from L640 billion at the onset of the credit crunch in August to L249 billion by the end of September, suggesting British lenders have been hit even harder than US banks in relative terms. Total sterling assets dropped from L3,244 billion to L2,876 billion.

"This is one hell of a shock to the financial system," said Professor Tim Congdon, a leading monetarist at the London School of Economics.

"A market that has taken 30 years to build has completely imploded in a matter of months. Lenders have been squeezed savagely. We've moved into a different era," he said.