Car Insurers Debate Over Future Profits

UK car insurers have been running an unprofitable business for 14 years. Independent market analysts, Datamonitor, say 2009 looks to be a profitable year despite the doubts

March 13, 2008

Budget Report Expectations

Chancellor Darling's Budget Report is expected to raise taxes on alcohol, fuel emissions, flights and many other issues concerning the economy. Tax burdens expected to increase on poorer families

March 12, 2008

Card Fraud Rises Again

Card fraud has increased over past year. Whilst chip and PIN technology has been successful in the UK, criminal activity overseas has increased 77 per cent

March 12, 2008

Tax Cuts Needed To Restore Confidence

Appeals for corporate tax cuts are submitted to the Treasury as it prepares its Budget report this Wednesday. Business and banking sectors are worried about the direction of the UK economy

March 10, 2008

First Time Buyers Take Hit From Stamp Duty

Stamp duty tax has not kept up with the rate of increase in house price inflation over the past decade. Yet another hurdle first-time buyers must leap over to get on the property ladder

March 10, 2008

Read all Finance News

Northern Rock May Offer Guarantee

Treasury chief Alistair Darling is receiving criticism for the way he is handling the Northern Rock crisis. The problem became public on September 14 when the Bank of England announced it provided funds Northern Rock because they had trouble acquiring loans from other banks. The offer of loans to a bank is not at debate. Legal and financial authorities are disgruntled by the way the loans were announced, and the fact that the government did not stop a run on the bank.

The problem did not arise from the fact that Northern Rock’s outlook appeared to be overtly shaky, but because UK banks are reeling from the collapse of the US sub prime mortgage market last year. The collapse of the US market closed 70 major banks. Man UK banks who invested in the US sub-prime mortgage market were hit hard.

Government officials are trying to reassure the public that Northern Rock is solvent. This did not stop customers from flocking to Northern Rock’s branches to withdraw their money. Nor, has it stopped the company’s shares from collapsing.

The Financial Times said recently that Northern Rock borrowed £3 billion in publicly funded loans. Adam Applegarth, Northern Rock’s Chief Executive, did announce that the company planned to borrow from the Bank of England, but did suggest a figure. There is no suggestion that the money was needed to divert a possible closure of the bank, or was needed to protect consumer’s money.

"We don't comment on corporate activity of that nature," company spokeswoman Jemma Rundle said.

A Bank of England spokeswoman said the £3 billion figure is speculative.

"What happens is that various commentators have looked at our balance sheets and seen that it's expanded," the spokeswoman said, speaking on condition of anonymity in line with bank policy. "They've gone and made a supposition out of an expansion in the balance sheet."

Published on September 26, 2007

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