Citibank ups prime rate 1%, a sign of trouble

Trend-setting Citibank, the nation's second-largest bank, raised its prime lending rate by 1 point, to 14 percent, in a move that spelled trouble for the economy. Most of the nation's biggest banks, led by Chase Manhattan, had boosted their prime rate a half point, to 13 1/2 percent, because of the Federal Reserve's decision last week to raise the discount rate it charges member banks. The higher prime rate will eventually spell bad news for business -- especially the automobile, appliance, and housing industries -- because the banks' moves will filter down to the small borrower.