Several of the nation's largest banks raised their prime rates to 12 1/2 percent from 12 1/4 percent, continuing a new upsurge in interest rates that some analysts fear eventually could stall any economic recovery.
The rise came as new figures from the Federal Reserve Board showed the nation's basic money supply climber by $1.1 billion in the week ended Sept. 10 -- a move likely to maintain pressure for interest rates to rise still higher.
Meanwhile, in a reflection of the recent jump in home mortgage rates, the government announced yesterday it is raising the maximum interest rate for FHA and VA mortgages to 13 percent, from 12 percent previously.
At the same time, the Fed's policy-making Open Market Committee disclosed it voted Aug. 12 to lower its third-quarter targets for the basic monetary aggregates in a further effort to slow the growth of the money supply.
Separately, the Commerce Department reported yesterday that the output of the nation's economy plunged more rapidly durilng the April-June quarter than it previously had thought, while the inflation rate was slightly higher.
The department's revised figures also showed that the profits of America's corporations fell more sharply during the second quarter than reported in preliminary estimates.
The increase in the prime rate -- the interest rate that banks charge their most creditworthy corporate customers -- had been widely expected. The prime has been rising steadily since mid-August after plunging from an April peak.
Although yesterday's increase was modest, it was expected to exert further pressure on home mortgage rates, which have been climbing steadily in response to interest-rate increases in short-term markets.
Analysts say the main reason short-term rates are rising is that lenders are becoming wary about the ability of the Federal Reserve Board to hold the money supply growth in check enough to ward off a new round of inflation.
The increase is being viewed with some alarm by the Carter administration, which is fearful that another sharp run-up in interest rates could stall or abort the economic recovery. Soaring mortgage rates hurt housing last spring.
Although the Feds didn't intend it, the monetary aggregates spurted in June, and the central bank has had some difficulty holding them down in succeeding months. Many analysts believe rapid monetary growth helps spur inflation.
Among the banks raising their prime interest rates yesterday were Chase Manhattan, Chemical Bank and Manufacturers Hanover Trust Company of New York; Wells Fargo Bank of San Francisco; and Girard Bank of Philadelphia.
The $1.1 billion increase in the money supply came in the narrowest measure of monetary growth, known as M1-A, which includes currency and demand deposits. The increase pushed M1-A to $383.1 billion, from $382 billion the week before.
By a broader measure of the money supply known as M1-B, which includes other forms of checking accounts at banks and thrift institutions, rose $1.8 billion to a new total of $406.1 billion.
For the latest four weeks, M1-A averaged $380.9 billion -- a gain of 13.3 percent from 13 weeks ago -- while M1-B averaged $403.1 billion, racking up a 16.2 percentage rate of growth.
The changes announced by the Fed's Open Market Committee reduced the targets for the growth of M1-A, M1-B and M-2 over the June-to-September quarter to 6 1/2 percent, 9 percent and 12 percent, respectively.
The revised figures from the Commerce Department showed the "real" gross national product, or actual volume of the economy's output, fell at an annual rate of 9.6 percent in the second quarter, rather than 9.1 percent.
The department said the same figures showed prices rose over the quarter at an annual rate of 10.7 percent rather than 10.6 percent, as reported previously.