The retail run on Northern Rock continued apace in October despite government guarantees on deposits, judging from Building Societies Association savings figures released today. Societies attracted a record £3.0 billion of new receipts, up from £2.8 billion in September and just £770 million in October last year. According to BSA Director-General Adrian Coles, “it seems that the majority of these deposits are funds withdrawn from the Northern Rock bank”.

A conservative guesstimate is that building societies enjoyed additional Rock-related inflows of £2.5-3 billion in September and October combined. With societies accounting for 20% of the retail deposits market, this suggests total withdrawals from the troubled lender of £12.5-15 billion for the two months, equivalent to more than half of its £24.3 billion of retail funding at mid-year.

Money supply figures also released today showed monthly M4 growth of just 0.1%, down from 0.9% in September. Details reveal that the drop reflected a fall in “net sterling lending to non-residents”. This is likely to be related to selling of UK securities by foreigners in the wake of the Northern Rock crisis.