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Northern Rock to appear on Government accounts

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by Kay Mitchell

Crisis-torn Northern Rock is to be put on to the Government’s books according to the Office for National Statistics (ONS).

This move has been widely expected following a Government rescue package for the lender which has already amounted to £25 billion in loans from the Bank of England.

The Bank of England will now be fully included in the Government’s public sector finances so if it is called on to lend emergency funds again those loans would go directly on to the public account.

The Government hopes to recoup the rescue loans in the next 3 years.

The ONS said the decision, which will be backdated to 9 October 2007, does not mean that Northern Rock had been nationalised.

There are 2 rescue proposals for the ailing lender, one includes a consortium led by Sir Richard Branson’s Virgin Group and a stand-alone solution proposed by the board of Northern Rock.

It is believed the preferred bidder is Virgin but the company has announced it will make at least 1,000 redundancies if it is successful in taking over Northern Rock.

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News posted: February 8, 2008

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