Northern Rock: Value for money

Christine Seib

There will no doubt be quibbling about Northern Rock's new chief executive's pay — £700,000 a year, plus £1.2 million over two years, and the opportunity for further bonuses under the bank's new incentive scheme.

Questions will be asked about whether a bank in public ownership should fork out almost £2 million a year in guaranteed pay to anyone. Frankly, Ron Sandler, the bank's executive chairman, had little choice.

The time it has taken to find a new chief executive — the bank was nationalised in February — indicates that he was not inundated with applications and that anyone who was interested needed a long time to consider the move. But Gary Hoffman looks like he might have been worth both the wait and the money.

Barclays' vice-chairman has long experience in credit, having run Barclays' successful credit card business, Barclaycard, for some years. This is an area to which Northern Rock, as it runs down its loan books, must pay close attention. As a banker of almost 30 years' experience, he has seen several economic cycles and, as the former head of Barclays' UK business, knows well how these cycles affect Britons' bank balances.

Finally, he has sat for several years on the board of one of the world's largest banks and will bring the professionalism that Northern Rock, in its previous guise, seems to have lacked.

MPC: Great divide

Grainne Gilmore

The first three-way split in the MPC in more than two years reminds us of the quandary facing the Bank's rate-setting committee. Inflation has spiralled to nearly twice the Bank's 2 per cent target, and the economy is slowing, with the CBI today forecasting a recession in the manufacturing sector in the second and third quarters of this year.

The bank's shot across the bows on interest rates - indicating that there could be a rate rise next month - has been taken with a pinch of salt by most economists however. Analysts say that while the Bank wants to reassure consumers that it will raise rates if it thinks the inflationary threat is rising, the likelihood of a rate rise is still minimal. What such talk of rate rises does indicate, however, is that rate cuts are a long way away.

Vodafone: Ring back