Rock expects £30bn loan this year

      Northern Rock and the Bank of England expect that by the end of the year the Rock will have borrowed £30bn from the central bank, the BBC has learned. It follows Thursday’s news that Northern Rock has already borrowed almost £23bn in emergency funding. That is roughly £730 for every UK taxpayer and marks a rise of £2.2bn from the week ended 31 October. Northern Rock has been in trouble since the global credit crunch hurt its business and led to a run on the bank. To win back investor confidence, the government has guaranteed all Northern Rock deposits and loans. Bigger problem

The BBC’s business editor Robert Peston says this means that the UK taxpayer’s exposure to Northern Rock could be much more than currently thought.

“The extent of public sector support goes beyond these direct loans,” he said.

“The Treasury has also indemnified a further £20bn odd of retail deposits,” he explained.

“So we are talking about total public-sector exposure to the Rock of £40bn – equivalent to around 3% of our entire economy.

“And that exposure could become much bigger, as other loans to the Rock fall due for repayment. ”

Later on Thursday, Mr Peston learned that Northern Rock and the Bank of England were projecting that the firm would have borrowed “a staggering £30bn from the Bank of England” by year end, he said.