Prime lending rate up another notch

Chase Manhattan, Manufacturers Hanover, and Bankers Trust were among banks boosting their key prime interest rate from 19 to to 19 1/2 percent even though the nation's money supply has fallen sharply.

Analysis fear the Federal Reserve may need to tighten credit further, putting pressure on the banking industry to push the corporate loan rate to 19 1/2 or even 20 percent.

Even with the latest drop in the money supply, money growth remains above the Federal Reserve's targ ets. In addition, business loan demand has also increased.