Lloyds Share News (LLOY)

Interest rates may have to rise far more sharply than households and markets expect as the Bank of England moves to head off inflation risks, the former deputy governor said yesterday, the Times reports.Sir John Gieve told a City of London audience that solid economic growth could prompt the Bank to raise rates to between 2.5% and 3% in 2011 ? above market expectations. Attending the same conference, Brian Coulton, an analyst at the credit rating agency Fitch, said that the risk of inflation now trumps that of deflation and that the Bank must make sure it does not get "behind the curve" in tackling rising prices.Citigroup is preparing to sell Egg, its UK online banking business, as part of its plans to dispose of peripheral operations. The American banking group is thought to be planning to launch an auction for the business in the autumn with a view to selling Egg this year. Citi has made clear its intention to sell off non-core assets. The bank is under political pressure to repay the US government after it received tens of billions of dollars in taxpayer support during the financial crisis, the Telegraph reports.Yields on short-term US Treasury debt have fallen to the lowest in history on mounting expectations of extra stimulus from the Federal Reserve. Two-year rates fell to 0.52% after a further batch of grim data hinted at a sharp slowdown in the second half of the year. Factory orders fell 1.2pc in June, while consumer spending fell flat, the Telegraph reports.Supermarket giants face being named, shamed and fined if they bully their suppliers, under plans unveiled by the Government yesterday. The Groceries Code Adjudicator (GCA) will monitor the 10 UK grocers with turnover above £1bn - Tesco, Asda, Sainsbury's, Morrisons, Waitrose, Marks & Spencer, Aldi, Lidl, Iceland and the Co-operative Group - and will take action against any which, for example, exert unwarranted financial pressure on suppliers, make retrospective changes to contracts, or impose prohibitive payments on suppliers to have their products sold in stores, the Independent reports.Lenders to Connaught have started selling their loans to the company, in a sign of their concern about the state of the embattled social housing maintenance group. Barclays, one of Connaught's syndicate of banks, which is led by Royal Bank of Scotland, on Monday night sold its entire exposure of £19m ($30m) for about 37 per cent of face value, people with knowledge of the transaction said, the FT reports.Controversial plans to build a string of huge wood-fired power stations to generate "green" electricity were dealt a blow yesterday after one of Britain's biggest energy companies shelved a £2bn project to construct three plants, blaming continued uncertainty over government subsidies. Drax, operator of the coal-fired station near Selby in North Yorkshire that produces 7% of the country's electricity, had been planning to construct the biomass stations at the nearby port of Immingham and on land adjacent to its existing station, the Times reports.QinetiQ has announced a further 325 redundancies only a month after the defence research company shed 391 staff. The latest redundancies principally will affect the company's test and evaluation centre at Boscombe Down, Wiltshire, which researches military aircraft capabilities for the Ministry of Defence. The remaining jobs will go at weapons evaluation ranges operated by the company for the MoD. The former state-owned Defence Evaluation and Research Agency has said that it needs to cut costs by about 10 per cent after issuing two profit warnings at the start of the year, the Times reports.Lloyds Banking Group is set to spark fresh public anger today when it unveils profits of about £1 bn for the first half of the year.Analysts believe that Britain's biggest retail bank, which is 41% owned by taxpayers, has had a stronger-than-expected six months, benefiting from rapidly falling bad debts and the ability to charge much higher prices to customers, the Times reports.BP faces penalties of more than $20bn (£12.5bn) for the Gulf of Mexico oil spill under the US Clean Water Act if the UK group is found liable for gross negligence, according to the latest estimates of the leak's size. The new estimates of the spill's impact came as BP started its "static kill" plan to plug the well earlier than had been expected because of positive results from tests, the FT reports.BP's new chief executive will arrive in Moscow today for the first time since a bitter row with the oil giant's Russian joint venture partners forced him to flee the country in 2008. In an overnight visit aimed at repairing BP's delicate relations in Russia ? the source of 25 per cent of the company's global oil and gas production ? Bob Dudley is travelling with Tony Hayward, his predecessor, for talks with Igor Sechin, the Russian Deputy Prime Minister, as well as other business partners, the Times reports.BP has been unexpectedly hit with a $10bn (£6.2bn) lawsuit related to an alleged leak of toxic chemicals at its Texas City refinery earlier this year, adding to its woes over the Gulf of Mexico oil spill. Tony Buzbee, a Texas lawyer also representing Gulf residents affected by the spill, on Tuesday filed the class action lawsuit on behalf of 2,000 claimants linked to an incident in April and May, the Telegraph reports.