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Interbank rates aggravated by Northern Rock cash flow, says Ward

New Star economist Simon Ward says the upward pressure on interbank interest rates has been aggravated by a flow of cash back to Northern Rock.

He says: “Other banks benefited from Northern Rock’s woes last autumn, as savers withdrew funds from the troubled lender and redeposited them elsewhere. Now, the reverse flow is occurring, with savers lured back by attractive rates and government guarantees and Rock’s mortgage borrowers encouraged to refinance with other lenders.”

Rather than lend its surplus cash back to other banks in the interbank market, Rock has reduced its borrowing from the Bank of England, according to Ward.

“The Bank of England weekly Return suggests the Rock loan has fallen from a peak of £27 billion in January to £21 billion currently.”

Ward argues that the Bank of England should increase longer-term lending to the market to offset the liquidity drain from Northern Rock.


Spring forth

The Easter break heralds the start of spring. As Wikipedia says, spring is seen as a time of growth, renewal and new life being born. The term is also used as a metaphor for the start of better times. People change jobs and the lighter days result in more time to househunt which may please the mortgage lenders as the CML figures show that gross mortgage lending fell to around £24bn in February, down by 7 per cent from £25.9bn in January.

Axa Framlington bolsters emerging markets team

Axa Framlington has appointed Neil Denman as a fund manager on the group’s emerging markets team.Denman will report to William Calvert, who heads up the team and is lead manager on the £145m emerging markets fund.Denman joins from Hexam Capital Partners where co-managed the global resources absolute return fund.Axa Framlington chief executive officer Robert Kyprianou […]

Certification guide

Guide: how to… certify your pension scheme

Certification is highly complex and surrounded by a minefield of information and auto-enrolment jargon, which can make it very difficult to understand. However, for many employers it is a necessary process that must be executed successfully.


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