Despite being allegedly ‘nationalised,’ the banksters running Northern Rock have announced that they are increasing the cost of a number of their fixed-rate mortgage deals, defying orders from the Bank of England not to make their mortgages even more expensive for new customers.

The move comes as Bank of England Governor Mervyn King warned that nationalisation of the entire banking system would not be ruled out if lending does not pick up. What this actually means is that taxpayers will once again be called upon to pay for Labour’s dictum of “nationalise the losses and privatise the profits.”

Northern Rock, which was the first bank to be nationalised in February, is increasing some of its fixed rate mortgage deals by up to 0.3 percentage points. HSBC is increasing its popular lifetime tracker mortgage from 0.99 percentage points above the base rate to 1.64 points above it.

The two banks insisted the increases were entirely justified because the deals were so cheap compared with the competition. The rises fly in the face of calls from the Bank of England for banks to boost lending and cut rates in line with falling interest rates.

Before the changes, Northern Rock had been offering a two year fixed-rate mortgage for 4.99 percent to someone with a 25 percent deposit who paid a £995 fee.

This was the second best deal on the market. However, now it has been increased to 5.19 percent.