Seven councils in legal action against major bank over LOBO loans

Seven councils are taking legal action against Barclays Bank over claims that they were mis-sold loans worth more than £500m.

Those involved are: Leeds, Greater Manchester Combined Authority, Newcastle, North East Lincolnshire, Nottingham, Oldham and Sheffield.

Between 2004 and 2010 they agreed 49 lender option borrower option loans, known as LOBOs, which have a variable interest rates that can be changed by the lender.

The councils want the High Court to allow them to exit the loans without penalties.

They say that interest rates on the LOBOs were fraudulently set because Barclays was involved in the Libor interest rate-setting scandal.

Councils took out a protective claim against Barclays last summer.