Northern Rock pulls savings offers after rush of deposits

Northern Rock has withdrawn several savings products after a surge in deposits put it close to breaking a pledge not to take advantage of its state ownership, it said yesterday.

The bank said recent turmoil in financial markets, which included the nationalisation of rival Bradford & Bingley and the government-brokered takeover of HBOS, "has led to a significant inflow of retail deposits, particularly in recent days."

Northern Rock was taken under state control in February and committed to limit its balance of retail deposits to 1.5 per cent so its state-backing didn't give it an advantage over rivals.

Its retail balances had not exceeded that level but the bank said it would withdraw several products for new customers from yesterday, including its silver savings, business reserve and a range of fixed rate bonds.