Customers besiege city branch of troubled bank

Reports that the Newcastle-based bank has become the highest-profile UK victim of the global credit crunch caused by the mortgage crisis in the US triggered fears the bank may be forced to close.

And despite the Bank of England helping Northern Rock - Britain’s fifth-largest mortgage lender - customers remained uncertain about the future of the bank.

Around 50 people queued outside the Northern Rock on Pinstone Street before the branch opened.

Bank staff walked up and down the queue assuring customers there was no need to worry.

But worried customers said they were unsure.

Self-employed Steven Lee, aged 34, of Parson Cross, said: “I’ve had a savings account at the branch for six or seven years.

“But when I heard on the news that the Northern Rock was in crisis I decided it might be time to come down here and get my money out.

“Everyone else in the queue seems to be doing the same.”

MPs have acted to stop the widespread panic.

The Government said the Bank of England had agreed to provide emergency funding - an indication it believed problems at the Northern Rock were temporary.

Chief executive Adam Applegarth said the Bank of England’s support “reflected a recognition that Northern Rock is solvent”.

But the Newcastle-based group’s profits will be between 500 million and 540 million this year - well below the 647 million expected by the market.