The former Barclays CEO Bob Diamond faced a panel of MPs yesterday and his evidence has far reaching implications for the City of London.

Andrew Lilico, Director of consultancy Europe Economics, believes that the scandal over the Libor rate is "potentially catastrophic" for Britain's role in financial services and legal services.

"I think we're talking about a very serious event here," he told the BBC Today programme's business presenter Simon Jack.

Mark Boleat, chairman of the Policy and Resources Committee of the City of London, agrees that it is "damaging" for the City of London

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