Northern Rock has revealed plans to shed around 1,300 jobs as it reorganises operations and looks to the future.
This figure is lower than originally expected, which is good news for some members of staff who wish to stay. Northern Rock are anticipating around 500 people taking voluntary redundancy, leaving just 800 to be selected by management. The original estimate was for around 2,000 job losses, but discussions with staff representatives and management has lowered that number.
After being nationalised earlier this year Northern Rock has a duty to pay back the money loaned to it and in order to do this it has had to revise the way it operates. Cutting costs but remaining active in the key markets is how this will be achieved, hence the job losses now being applied.
,p>The Alliance and Leicester current account offer that has a credit interest rate of 8.5 percent gross is being extended until the end of September according to a recent announcement.
The move has been made to encourage more consumers to save regularly, the high interest rate being a real eye catcher designed to highlight the benefits of saving. The accounts that are included in this Alliance and Leicester promotion are the Premier 50 and Premier Direct current accounts.
Younger savers also have an extension on their own promotion. The Alliance and Leicester Premier 21 account is a current account specifically for those aged between 16 and 21 which is offering a 10 percent interest rate during the promotional period.
Representatives from Virgin Money have been discussing the potential purchase of troubled Northern Rock, they being part of a larger consortium.
The plan, if accepted, will be to make an initial GBP 11 billion payment, via commercial debt providers, and then put in a further GBP 1.3 billion for fresh capital investment. At the moment Northern Rock appear to accept the proposal put before them although there are questions over the longer term risk that taxpayers would face on the outstanding debt position.
The government will no doubt acknowledge this risk but it will be mitigated in some way by the interest rate they will earn on it, bringing extra revenue in to cover the risk, to a certain extent anyway. Right now Virgin Money look like firm favourites to take the Northern rock situation on, though only time will tell if that is the case.
