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Northern Rock denies it is trying to withdraw from the sub-prime market; BSkyB's takeover of Amstrad gets the green light; Disgraced former BP boss returns to full-time business

Northern Rock has denied it is trying to withdraw from the sub-prime market despite a decision to make mortgages for credit impaired homebuyers less attractive by upping rates.

Next week, rates on sub-prime loans marketed by the bank but underwritten by Lehman Brothers will increase by as much as 1.25% - adding around £75 to the cost of a typical monthly repayment.

The move could price them out of the market, but Northern Rock denied that this was its intention, insisting it was simply reacting to competition.

Northern Rock entered the sub-prime sector earlier this year under a tie-up with Lehman Brothers subsidiary SPML.

BSkyB’s £125m takeover of Sir Alan Sugar’s Amstrad business was today given the green light by regulators.

The Office of Fair Trading (OFT) cleared the deal which it said did not breach competition guidelines.

Sir Alan, who is chairman and chief executive of the firm as well as the majority shareholder, agreed to sell Brentwood-based Amstrad to the satellite broadcaster at the end of July.

BSkyB extended its offer period for the deal earlier this week after it revealed it had received acceptances for almost 86% of the company’s stock. Shareholders now have until September 4 to accept the offer.

The two firms already have a close relationship as Sir Alan’s firm supplied around 30% of the set-top boxes purchased by Sky in the year to June 30.

Disgraced former BP boss Lord Browne returned to full-time business today after agreeing to join a New York-based private equity firm.

His appointment at Riverstone Holdings, which specialises in the energy sector, comes almost four months after he quit oil giant BP when it emerged he lied to the High Court during a battle to block stories about his private life.

Lord Browne takes on the post of managing director and managing partner of Riverstone’s European business and will be based in London, where the group is soon to open an office.

The FTSE Mid-250 index closed up 23.8 at 10969.5.

The pound at 5pm was US$2.0095 compared to US$2.0042 at the previous close while the euro at 5pm was £0.6789 compared to £0.6766 at the previous close.


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