As the lines of people waiting to make withdrawals from Northern Rock bank dwindled today, the British lender’s stock rose, bringing with it other hard-hit British financials. Northern Rock's huge losses in the mortgage market sparked a sell-off, drawing emergency funds from the Bank of England. But the government's move yesterday to guarantee savings and provide emergency credit to any buyer halted the fire sale.
So massive were Northern Rock’s problems that every single share of it changed hands in just two days. Rumors, ultimately untrue, that Alliance & Leicester had also dipped into emergency funds drove its price from 639p down to 282p yesterday. Both have recovered some ground this morning, but Telegraph analysts don’t expect the sector to return to pre-crisis levels.