You couldn't make it up, Northern Rock raises rates

baileysbattlebus

Northern Rock are not allowed to be too competitive - imagine the out cry from the other banks if NR had the most competitive rates -

Northern Rock said has to operate within the rules it set itself when the bank was nationalised.

"We have a self-imposed competitive framework and that includes not being a market leader in certain categories," a spokesperson for the bank said.

The bank added not all products have been changed and tracker, buy-to-let and lifetime products remain the same.

As part of its conditions for receiving taxpayers' money, Northern Rock had to promise not to use its position as a government-backed bank to its advantage and cannot be a market leader.

Borrowers will be bemused that the state-owned lender is raising its fixed rates when the government is pushing lenders to pass on rate reductions.

"Northern Rock's original reductions were too aggressive, making it difficult to cope with demand. It is evidence of the fact that the majority of lenders are not offering competitive fixes."

Lenders have more than tripled the profit margins on fixed-rate lending in the last year. The gap between the cost of funding new fixed-rate lending on the money markets and the rates that banks charge hard-pressed customers has jumped from 0.8 percentage points last year to 2.6 percentage points today, according to Moneyfacts.co.uk, the financial website.

WTF?_2

baileysbattlebus wrote: »

Northern Rock are not allowed to be too competitive - imagine the out cry from the other banks if NR had the most competitive rates -

In terms of retail deposits they have the huge advantage (which we saw during the recent crisis) of being government owned and guaranteed - though I guess most British banks could say that these days......

Generali

!!!!!!? wrote: »

In terms of retail deposits they have the huge advantage (which we saw during the recent crisis) of being government owned and guaranteed - though I guess most British banks could say that these days......

My feeling is that banks should pay for a Government guarantee rather than just be given it. It has a genuine value and it is something that should be available to banks at a price once all this is over.

Savers can the choose - go for a bank with a 100% guarantee and get a lower rate of interest or go for a non-guarantee bank and risk losing your savings.

pararct

In addition to all the comments above NR are looking to shrink it's mortage book. Charging more than competitors will assist this...

scooby5_2

ad9898 wrote: »

This is my thought as well, it's the cherry on the top of Labour's cake. We are going to pay heavily for Labours incompetence, even more than with the disastrous Callaghan government.

Brown is a fool, liar and a fraud and while he's lapping it up on the American lecture curcuit in a few years, we will be paying the price for the unelected one eyed wonder.:mad:

And Cameron is intellectually bereft, a toff and a heartless fool and he will never be doing the lecture circuit as no-one would pay to listen to him. And don't even mention Thatcher's incompetence...:rolleyes:

Gorgeous_George

I think NR have grabbed all the customers they need for now while rates were higher. Raising rates for NEW borrowers is them saying 'No more for now, thank you'.

Nothing surprising here.

GG

Trollfever

Northern Rock are not allowed to be too competitive - imagine the out cry from the other banks if NR had the most competitive rates -

What will happen when the Government nationalises all the banks for not lending to ailing companies? (Woolies & MFI & ??????????????)

.

Generali

Trollfever wrote: »

What will happen when the Government nationalises all the banks for not lending to ailing companies? (Woolies & MFI & ??????????????)

.

Then you end up with an economy like the Soviet Union in the post-war period with the Government propping up increasingly ridiculously failed industries using repressive means.

Trollfever

Speaking to the Treasury Select Committee, the governor of the Bank of England said "this was more important than anything else at present".
He said the government "may have to intervene directly" to ensure the banks start to increase their lending.
Mr King added that nationalising banks could not be ruled out.
We will take whatever action is necessary to ensure that inflation is close to target in the medium term


Mervyn King

"I think given what we have seen it would be an extremely brave person that would rule anything out," he said when asked whether nationalising banks was a possibility.

http://news.bbc.co.uk/2/hi/business/7747608.stm

GDB2222

scooby5 wrote: »

And don't even mention Thatcher's incompetence...:rolleyes:

Waiter to Thatcher: "The veal or the fish, madam?"
Thatcher : "The veal"
Waiter : "And the vegetables, madam?"
Thatcher (nodding in the direction of her cabinet colleagues): "They'll have the veal, too"