Three held in Libor rigging inquiry

Three men have been arrested in connection with an investigation into the rigging of the interbank lending rate Libor, the Serious Fraud Office (SFO) said.

The British nationals - aged 33, 41 and 47 - have been taken to a London police station following searches at a property in Surrey and two premises in Essex.

The SFO opened its investigation into Libor manipulation in July after Barclays was fined £290 million by US and UK regulators for rigging the key lending rate which affects mortgages and loans. Other banks are also subject to investigation.

At the height of the banking scandal this summer, the SFO revealed it had been working closely with the Financial Services Authority (FSA).

The Government department, which is responsible for investigating and prosecuting serious and complex fraud, launched an inquiry into the entire banking sector.

It came after a number of traders at Barclays were found to have rigged Libor to boost profits and bonus rewards, while the bank was also accused of lowering submissions in a bid to alter the perception of the lender's finances.

The claims ultimately led to the resignation of Barclays boss Bob Diamond, sparked a criminal investigation and became the focal point of a bitter row in Westminster over ethics in the banking sector.