THE all-important interest rate at which banks lend funds to one another has nosedived to 0.89 per cent - its lowest level since mid-2004.

This is likely to be good news for many home owners, who are set to enjoy lower mortgage rates soon. Rates on other consumer loans may also fall.

But the outlook is not so good for investors holding fixed deposits - as their interest rates are likely to fall as well. And businesses big and small will not necessarily get a flow-on benefit of lower borrowing costs.

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