James Forsyth

Osborne to sell off the Rock

Osborne to sell off the Rock
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George Osborne will use his Mansion House speech tonight to, in the words of one source, "fire the starting gun" on the sale of Northern Rock.

 

Robert Peston, who had the story first, reports that "The chancellor hopes that the sale of Northern Rock will send a powerful signal that the banking industry is on a path back to more normal conditions, following the crisis of three years ago."

 

In an attempt to maximise return for the taxpayer, the whole of the "good bank" part of Northern Rock will be sold off to a single bidder. This means that the whole issue of discounted bank shares, which splits Osborne and Cable, with the Chancellor in favour, doesn’t arise.

 

But I expect that Osborne’s speech tonight will be overshadowed by the Governor of the Bank of England’s remarks. Word has it that he will warn that Britain still has several more years of hardship to come before the economy returns to health.