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Northern Rock repaying BoE loan already

New Star chief economist Simon Ward says the Bank of England’s “other assets” on its balance sheet are now £4.8bn below a peak reached in late January.

Ward suggests that this indicates Northern Rock is repaying its loan from the BoE as it enjoys a cash inflow from redeeming mortgages and saves attracted by its competitive rates and the unlimited government guarantee.

He says if this is correct, it would support analysis suggesting Northern Rock may pay back its loan much earlier than the three to four year horizon indicated in its business plan released at the beginning of this week.


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