Mr David Cameron, the Prime Minister, and Mr Nick Clegg, the Deputy Prime Minister, rather oddly wrote a letter to the rest of the Cabinet. ‘Deficit reduction and continuing to ensure economic recovery is the most urgent issue facing Britain,’ they said. Mr George Osborne, the Chancellor of the Exchequer said that banks had an ‘obligation’ to increase their lending: ‘Every small and medium-sized company that I have visited in recent weeks has had some problem with their bank,’ he said. The profits of HSBC, which took no money from the government during the financial crisis, doubled for the first half of the year to £7 billion. Lloyds, 41 per cent of which is owned by the taxpayer, made £1.6 billion, compared to a £4 billion loss a year earlier. Northern Rock Asset Management, the ‘bad bank’ part of the old Northern Rock business, made profits of £350 million in the first six months of the year; Northern Rock plc, the ‘good bank’ arm, which holds savers’ deposits, made a loss of £143 million.
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