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Shares in Northern Rock fall again

Shares in Northern Rock have fallen again on speculation that the lender will be sold off at a discount price.

The prices have fallen by about 16.67 per cent following criticism over the handling of Northern Rock's rescue.

Shares are now down 50 per cent since last Friday and have now reversed the earlier gains that followed the news that the Bank of England had guaranteed all savings in the bank on Monday.

The Bank of England had initially refused to prop up Northern Rock's business after the Newcastle lender found it could no longer access affordable short-term loans in the money markets.

Criticism has also been aimed at the central bank for not doing enough to secure a swift sale for the Newcastle bank.

The interest rate of seven per cent is believed to be a reason why banks are not keen to bid as they feel the interest rate is too penal.

BBC Business Editor, Robert Peston, commented: "Top British bankers - who met the FSA again yesterday - are sickened that their industry, the very heart of the economy, should have been tarnished by those pictures of anxious depositors scrambling to withdraw funds."