Is Northern Rock Dead In The Water?

As the government perform yet another U-turn on the future of UK bank, the Northern Rock, it has now emerged that the UK tax payer will be taking on liabilities totalling some £55 billion if the government go ahead with their latest funding option.  That is £2,000 for every man, woman and child in the UK!

As the situation seems to change each week there is little point in really assuming that the situation is finished because it has now dragged on for a considerable length of time.  There are even some suggestions that the bank should have been sold at the first sign of trouble, with a number of UK banks initially looking to take on the business.  However, due to a lack of focus, slow decision making and general mayhem in the markets the situation is still not resolved.

The fact that the taxpayer’s total exposure has now reached a staggering £55 billion has come as a shock to many, but it has also blown a hole in the otherwise faultless fiscal policy of Gordon Brown.  While he has been keen to step in and take the credit in recent times, he is now leaving many of the difficult questions for Chancellor of the Exchequer Alastair Darling to handle.  Indeed if the rumours are correct there seems to be something of a rift developing between Number 10 and the Treasury – something which we saw much of in the Blair / Brown era.