It would be unfair to hold the deputy governor of the Bank of England responsible for the rate-rigging scandal, believes George Osborne, who suggested Labour ex-ministers and aides could have played a part in the row.

Referring to the memo that BoI released on Tuesday, Osborne said the Bank has made it clear that they did not ask Barclays to “cut its Libor rate”. The Chancellor’s statement comes after Bob Diamond left his position with Barclays.

The memo from the Bank of England indicated that the last Labour government created pressure on them to manipulate rates at which banks borrow money.

Osborne’s fresh allegations can put Labour in an embarrassing situation now as Barclays also issued a memo saying “senior figures within Whitehall” raised questions earlier about the high borrowing rates.

“They (Labour politicians) were clearly involved and we just haven’t heard the full facts, I don’t think, of who knew what when”, Osborne said, adding cynically that the onus now lies on Labour’s shadow chancellor Ed Balls to answer a few questions.

Osborne warned that the country must safeguard London’s image as a major financial hub, since other financial institutions may now try to cast the capital in a negative light.

“There are lots of people around the world who are jealous of London and the UK because of its pre-eminence as a global financial centre”, the Chancellor of the Exchequer said on the day Prime Minister David Cameron suggested a public inquiry into the rate-rigging scandal which has undoubtedly shaken up Britain’s political quarters.

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