“Other assets” on the Bank of England’s balance sheet rose by a further £2.2 billion in the week to Wednesday 31st October, bringing the cumulative increase since 12th September to £22.8 billion. This is the best available estimate of the extent of the Bank’s support to Northern Rock.

The weekly rise is the smallest since the Rock crisis broke but follows a £4.7 billion gain last week. With deliberations on Northern Rock’s future dragging on, the loan seems likely to grow further and may approach £30 billion – the amount requested from the Bank by Lloyds TSB as a condition of its aborted rescue takeover.

The balance sheet figures also show the Bank has drained liquidity from the banking system over the last week, with reserves falling from £24.1 billion to £20.0 billion. This action seems inappropriate given that interbank interest rates remain high relative to Bank rate and suggests the Bank has yet to learn the lessons of recent events.