Northern Rock shares hit by takeover rumours

Crisis-hit mortgage lender Northern Rock suffered again today despite a stock market bounce on hopes of lower interest rates.

Shares in the Newcastle-based group fell 16% amid a near-3% rally in London’s FTSE 100 index, fuelled by the US Federal Reserve’s move to cut interest rates by 0.5% to 4.75% last night and a fresh intervention to unfreeze money markets from the Bank of England.