Northern Rock increase their interest rates

Northern Rock the bank that was fully nationalized this year by the UK government have gone against the governments wishes and raised its rates on its most competitive deals.

The state-owned bank raised its interest rates by 0.3 percent on its fixed rate deals, with its one-year fixed mortgage deal jumping to 4.19 percent from 3.99 percent.

Its most competitive one-year fixed mortgage has jumped from 3.99 per cent to 4.19 per cent.
The Bank of England and the government have warned UK banks that they need to reduce interest rates and increase lending to help steer the UK out of Recession.

Mervyn King, governor of the Bank of England highlighted the single most pressing challenge to domestic economy is to get the banks to resume lending in talks with the Treasury Select Committee.

When asked about the interest rate increase. Northern Rock defended their actions saying that to manage demand they were forced to raise the rate.

Source: timesonline Iron Man the movie