23 Feb

New Northern Rock mortgage strategy unveiled

New Northern Rock mortgage strategy unveiled

The government has unveiled Northern Rock's new lending strategy, which will see the nationalised bank increasing its mortgage provision.

Under the plan, the bank will offer £5 billion of new lending this year and a further £9 billion next year, as part of a wider government initiative to try to increase lending to stimulate economic recovery.

Such a move represents a reversal of the previous strategy of Northern Rock since nationalisation, which has seen it running down its mortgage book.

Last month the Treasury announced that this policy was to be changed.

As well as owning Northern Rock and Bradford & Bingley, the government also has large stakes in Lloyds TSB and the Royal Bank of Scotland.

Last week Liberal Democrat Treasury spokesman Vince Cable said the government had "in effect" nationalised these banks and should be directing them to lend more.

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