Taxpayers’ exposure to Northern Rock appears to have soared to £29bn, growing by £2.7bn in the past week alone, Bank of England figures suggest. The Time
Analysing the latest Bank balance sheet data for clues as to government lending to the Rock, Simon Ward, the New Star economist, said that the increase was consistent with reports of a pick-up in depositor withdrawals. 'It’s possible that a billion or two is due to other items but it [Rock borrowing] certainly looks on course to hit £30bn by the end of the year,' he said.
While Virgin Money is the preferred bidder for Rock, investors expect the private equity group J C Flowers to return shortly with a higher offer. Its original plan envisaged almost entirely wiping out existing shareholders. Another potential bidder, former Abbey chief Luqman Arnold, is thought to be within days of delivering a firm proposal to the Rock board.