Dear Listener,
Northern Rock. Two words that shook the City late on Thursday night when the BBC reported that Britain’s fifth biggest mortgage lender had gone to the Bank of England for a loan. It asked for the facility because it could not raise the money to fund its mortgages anywhere else. It’s the first time for more than 30 years that the Bank has bailed out a lender in this way.
Although no-one seriously believes that Northern Rock is in financial danger, queues formed at branches as customers tried to take their money out, and the online service became so slow it practically closed down. It may not be a crisis but it has certainly become a severe inconvenience for hundreds of thousands of savers who need – or want – access to their own money.
Tune in on Saturday, where we hope to hear the boss of Northern Rock explain what is going on.
Northern Rock is a victim of the growing crisis in the banking industry which has seen lending between banks virtually come to a halt. That has caused problems to other lenders. One has raised the rates charged to people who have borrowed money to pay off other debts. We hear from one listener whose monthly repayment has risen by £31 and fears she may not be able to afford it putting her home at risk.
We’ll be finding out what is happening to mortgage rates generally – rising – and reporting on savings rates – also rising and now above 7%...
…and asking the big question – What Next For The Banking Crisis And When Will It End?
Away from the credit crunch and the banking crisis, there are big changes planned in the way that you get someone to look after your affairs when you can no longer do it yourself. The current system of Enduring Powers of Attorney is being replaced on 1 October by a new arrangement, known as Lasting Powers of Attorney. A legal expert explains the new system. It’s more complicated and expensive, so should you sort out an EPA before it begins?
Don’t forget you can now download a podcast of the programme to your computer or sign up for a weekly download. Click here for more www.bbc.co.uk/radio/podcasts/moneybox
Best wishes
Paul Lewis
PS Don’t forget the live preview of Money Box on Saturday on BBC1 Breakfast between 8.45 and 9.