Northern Rock continues borrowing

A sign of a Northern Rock branch is seen behind a passing bus in London, November 26, 2007.

LONDON (Reuters) - Mortgage lender Northern Rock NRK.L may have borrowed as much as 29 billion pounds from the Bank of England since its crisis began, after a jump in loans last week, according to Bank data.

Northern Rock is likely to have borrowed 2.7 billion pounds last week, up from an estimated 1.1 billion pounds in the previous week, the latest Bank balance sheet data showed on Thursday. That would be the biggest weekly loan for five weeks, based on the data.

By 4 p.m. shares in Northern Rock, which is seeking a buyer, were down 4.7 percent at 115 pence.

"There have been reports of retail deposit outflows accelerating and this could be consistent with that," said Simon Ward, economist at fund manager New Star. "It looks as if by the time any deal is completed the retail funding base may have largely disappeared."

Northern Rock has been borrowing from the Bank of England since a financing crisis erupted on September 14, after it was unable to raise funds in wholesale markets.

News of the emergency loan sparked the first run on the savings of a major British bank for 140 years, and the bank is now seeking a buyer. A consortium led by Virgin Group VA.UL was picked as preferred bidder on Monday.

Northern Rock said the selection of Virgin had a "positive, reassuring impact" on its customers, after several of its rivals had reported big jumps in deposits in recent months, attributed to customers leaving Northern Rock.

The Bank and Northern Rock have refused to comment on how much has been lent, but Chancellor Alistair Darling said last week the balance sheet data in the weekly accounts gave a good guide.

"It's possible that a billion or two is due to other items but it (Northern Rock's borrowing) certainly looks on course to hit 30 billion (pounds) by the end of the year," New Star's Ward said.

(Reporting by Steve Slater; Editing by Quentin Bryar)