Northern Rock has paid back around £5bn of its Government loan, reducing its debts at an even faster rate than already thought.

Figures published by the Treasury showed that the size of the nationalised bank’s loan will have fallen from £24bn to £19.3bn by this summer. The debts were due to be eroded by a further £5bn by next March.

The news comes amid criticism that by shrinking its mortgage book, the bank risks making the UK economic downturn deeper than it might have been.

Daily Telegraph