Taxpayers' money tied up in Northern Rock is more at risk than first thought, the nationalised lender's chairman, Ron Sandler, has conceded, as the credit crisis threatens to undermine its restructuring, The Telegraph reports.
Appearing before the Treasury Select Committee yesterday, Mr Sandler admitted: "If house prices decline 5%, 10%, 15%, it would certainly put a great deal of stress on how we would deliver the plan. I don't want to pretend it is without risk and I don't think we should take anything for granted at this stage.
"The key risks are what is happening in the wider economy. If we suffer a downturn and this leads to higher levels of unemployment, then this would place considerable strain on the ability of the company to deliver the plan."
ALISTAIR DARLING LAUNCHED moves to repair Labour’s strained relations with business last night by accepting that tax rates must be competitive to prevent companies going abroad, according to The Times.
After warnings from several big groups that they may relocate, the Chancellor told the CBI that governments should remember that industry did have a choice and he was determined that British business should not be the “fiscal fall guy”.
“Business is increasingly mobile,” he said. “Tax rates have to be globally competitive. Business is the linchpin of the British economy.”
THE COST OF oil was poised last night to break through the $130-a-barrel barrier for the first time after supply shortages and forecasts of high prices for years to come led to a surge in buying on the world's energy markets, The Guardian reports.
US light crude rose by more than two dollars to trade at $129.31 after the Texan investor T Boone Pickens said he expected the price to hit $150 a barrel this year. Rumours from Israel denied by the White House that President Bush is planning a military strike on Iran added to the frenzied mood.
Nervousness spread to other financial markets, with concerns about rising inflationary pressures prompting a fall of almost 3% in London's main share index.IFAonline
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