Northern Rock shares jumped by a third on Wednesday after Jon Wood, one of the City’s shrewdest traders, confirmed he had built up a 4 per cent stake in the embattled bank through SRM Global, his $3bn (£1.5bn) hedge fund.

The shares rose by 66¾p to 273½p as other investors such as Swedish pension fund Andra AP-Fonden, which now has a 1.3 per cent stake, also bought into the bank.