Rocky times for Northern Rock
Updated on 14 September 2007
Newsroom blog: inside the morning meeting.
Unusually, a financial story leads the news this morning. The mortgage lender Northern Rock, the fifth largest in the UK, is in deep trouble. The Bank of England has had to bail it out - prompting a massive fall in the share price and a warning that the bank will miss its profit forecast.
This is more fall-out from the sub-prime lending market fiasco. Northern Rock was particularly vulnerable because it funds most of its mortgage lending by borrowing from other banks, rather than ordinary savings customers.
In the wake of the sub-prime farrago, banks are reluctant to lend to each other - so Northern Rock finds itself running out of cash, and only the Bank of England can help out.
The immediate questions concern the future of Northern Rock - likely to be a takeover target - and the regulator's role. Why did they let this happen?
But are any other mortgage lenders in a similar position? Will this be the harbinger, or even the catalyst for a wider downturn in the UK economy? It will probably make it more expensive to take out a mortgage in the near future. But will it stop Gordon Brown from holding an election?
Either way - if you're a Northern Rock depositor or lender, do get in touch - news@channel4.com.
Madeleine McCann is still in the headlines. Today's news lines are not particularly strong - there's unconfirmed talk of a large dose of sleeping pills being found in some forensic matter from Madeleine's body.
There's a temptation not to cover this, or to look at the issue of sleeping pills more generally. People might be wondering whether it's possible to accidentally kill your children with sleeping pills. The story is bound to move during the day in any case.
Likewise foot and mouth: We'll know more about the Egham outbreak - possibly including some data about whether the virus came directly from the previous site, or more worryingly, if it has been through other animals first.
How about some fun stuff for the end of the programme? Well, Nick Glass has made a film with Halie Selassie's official photographer, which should offer a fascinating insight into former Emperor of Ethiopia, regarded as an incarnation of God by the Rastafarian movement.
