Has the UK government done a deal with Virgin Money?
As the ongoing reorganisation of Northern Rock continues and news filters through to the market that Virgin Money has applied for a banking licence through the FSA (Financial Services Authority) it would appear inevitable that Virgin Money will make an offer for part or all of the Northern Rock business. Indeed there are rumours in the city that this is already a "done deal" with the government left to tie up the loose ends before the deal can be announced.
It is an open secret that Richard Branson has been looking to become more involved in the UK banking sector and an acquisition of Northern Rock, probably at a rock bottom price, would obviously present a very interesting entry strategy. However, the UK government will need to play this one very carefully because a giveaway of Northern Rock will infuriate taxpayers and an inflated price would see the operation stay with the UK government for the foreseeable future.
It seems that a disposal of Northern Rock would be in the best interests of both the government and UK taxpayers in the medium to longer term but nothing is ever certain in the ongoing economic environment.
Share this..
Related stories
Consumer spending to slow in face of crunch
UK banks' adoption of more stringent lending criteria is set to significantly cut consumer spending levels this years, a member of the Bank of England's monetary policy committee has predicted. Tim Besley issued the warning today in a speech at the Institute of Fiscal Studies, in which he noted that even small increases to the cost of borrowing for consumers have significant repercussions on spend...
Read MoreHas consumer confidence bottomed out?
News that consumer confidence appears to have picked up over the last month has been assumed by many to signal the end of the consumer confidence crisis. However, the consumer confidence figures reflect the views by many that now is the time to make a substantial purchase but confidence about the economy and the outlook for next year is still falling. Whether consumers are now wrapped up in the fe...
Read MoreHow long can taxpayers be expected to support the UK banking sector?
Time and time again the UK taxpayer has been assured that taxpayer funding was being well spent in supporting the UK banking system at a time when liquidity for business and personal use was at rock bottom. Even though there was some resistance to the injection of literally hundreds of billions of pounds into the system and directly into the banking sector, many were sold on the story by Gordon Br...
Read MoreIs the Bank of England now a puppet for the UK government?
As the UK banking crisis began some months ago, there appeared to be severe differences of opinion between the UK government and the Bank of England. However, as the situation worsened there appeared to be a change of mood at the Bank of England which slowly but surely came round to the government's way of thinking. Despite the fact that the Bank of England is wholly independent from the UK govern...
Read MoreRecent rate rises shake Brits' security
People in the UK have told Lloyd's TSB's monthly survey team that they expect a further hike in the interest rate in 2007.According to Lloyd's Corporate Markets poll, 77 per cent of Brits expect another creep in the interest rate, while 13 per cent believe the rate will stay the same and an optimistic seven per cent expect the rate to fall.Because of expectations of a higher interest rate, more pe...
Read More