Banking turmoil hits the street

The turmoil in the global banking sector hit the streets of Britain yesterday as thousands of Northern Rock customers queued to withdraw their savings from the mortgage lender after it was rescued by the Bank of England. As regulators and politicians called for calm, Northern Rock – Britain’s biggest mortgage lender – scrambled to contain the fall-out after it became the first UK bank in 15 years to be bailed out by regulators. Shares in Northern Rock plunged more than 30% as analysts slashed their earnings forecasts. The news also dragged down shares in other banks such as Alliance & Leicester, HBOS and Barclays. Home builders were also losers in UK stock markets yesterday, dragging the FTSE indices lower, after news of house price falls combined Northern Rock’s difficulties. Persimmon finished the day down 6.6% at 10.16p, while Barratt Developments was not far behind falling 4.7% to 829.5p. Financial Times 15/09/07 page 1, Daily Telegraph 15/09/07 page 1, The Times 15/09/07 page 1, The Guardian 15/09/07 page 1, The Independent 15/09/07 page 1