Banks' borrowing costs drop

The cost of borrowing between banks fell the most in almost two months yesterday in a sign that confidence is returning to markets.<br /><br />The London interbank offered rate (Libor) that banks charge each other for three-month loans dropped to pre-March levels indicating banks are now more willing to lend cash.<br /><br />Three-month dollar Libor rates fell to 0.883 per cent, euro Libor dropped to 1.271 per cent and sterling Libor fell to 1.383 per cent.