Bank Seven-Day Switch Scheme May Fall Flat

By Poppy Trowbridge, Business and Economics Correspondent

The Government wants banks to work harder to win your business and is backing an initiative to allow customers to swap current accounts within seven working days.

But exclusive research conducted for Sky News reveals that the public is largely unaware of the plan and among those in the know the Government's initiative is unwanted.

From September 16 the so-called 7-Day-Switch scheme will come into effect.

Customers wanting to swap banks can provide their preferred lender with personal details, the bank then makes all the arrangements to bring across salary deposits and bill payments - with a hassle free guarantee.

In a move to revitalise competition in high-street banking, Chancellor George Osborne confirmed the plans back in February after the regulator highlighted how little choice existed in the current account market.

But in a poll of more than 2000 bank customers, 44% of those surveyed said they had never heard of the service.

Of those who had, 53% would not even consider switching when the guarantee is in place.

That is perhaps because 82% say they are happy enough with their current account, another indication that the initiative isn't needed by many.

The four biggest banks in Britain - Lloyds Banking Group, Barclays, Royal Bank of Scotland and HSBC - control three quarters of the current account market, according to figures from the Office of Fair Trading.

That means switching accounts may not result in drastically better deals at one bank or another.

Ali Steed, a personal finance expert at mymoneydiva.com, says many of the rates and products don't differ much from bank to bank.

"At the moment, because interest rates are actually very low, the amount of money you can actually get on your savings - from anywhere on the high street - is not really going to put you in a position where you can beat inflation."

If the government initiative is to have any immediate effect it is likely to be in customer service.

Michael Ossei, from uSwitch, says: "Banks will have to work harder to both attract new customers and keep their existing ones, which means that accounts must offer better value for money and customer service."

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Vince Cable Calls For Minimum Wage Increase

Business Secretary Vince Cable is pressing for an increase in the minimum wage amid concerns that many lower-paid workers are still not benefiting from the burgeoning economic recovery.

Speaking before the Liberal Democrat party conference in Glasgow today, Mr Cable said he would ask the Low Pay Commission to restore its value, which he estimates has fallen in real terms by 10% to 12% since the crash of 2008.

"We cannot go on forever in a low pay and low productivity world in which all we can say to workers is, 'You have got to take a wage cut to keep your job'," he told told The Guardian.

Mr Cable said action to boost low pay should be combined with measures to tackle the abuses of zero-hours contracts.

"We have got to enter into a different kind of workplace. For a very long time, five or six years, wages have been suppressed in low wage sectors. I am sending a signal that we are entering a very different environment," he said.

In a further sign that cost of living issues are set to dominate the annual party conference season, his Lib Dem colleague - Treasury Chief Secretary Danny Alexander - urged employers to ensure that staff benefited in their pay packets as profits picked up again.

"It's not for me as a Treasury minister to start telling employers what their pay policies should be, that's a matter for firms," he told The Daily Telegraph.

"But of course, as growth returns to our economy and we see businesses being successful, the workforce will want to and should share in that success."

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House Price Growth 'Should Be Capped At 5%'

A 5% cap should be placed on annual house price growth to prevent another property 'bubble', surveyors have suggested.

The Royal Institution of Chartered Surveyors (RICS) has called on the Bank of England to limit yearly house price inflation to 5% in order to take the "froth" out of any future booms and put a stop to any "dangerous build up in household debt".

It suggested the Bank could put the brakes on house price growth by imposing a ceiling on the amounts of money banks are allowed to lend.

It could also put caps on the term of a mortgage, the amount people can borrow in relation to their deposit or the sum they can borrow in relation to their income.

The request - an unusual one from an industry group that typically benefits from rising prices - comes months before the Government begins to offer mortgage guarantees to "riskier" homebuyers under its controversial Help To Buy scheme.

Fears have been raised that a recent surge in housing market activity will result in borrowers over-stretching themselves.

Recent figures from Halifax showed that house prices are 5.4% higher than last summer and RICS has said that 40% of surveyors have been seeing house prices rise rather than fall, the highest proportion in almost seven years.

Asking prices in London are up by 10% year-on-year, according to recent figures from property search website Rightmove.

BoE Governor Mark Carney has vowed to prevent any new property bubble

"Sending a clear and simple statement to the public that the Bank of England will not tolerate house price rises above 5% would help restrict excessive price expectations across the country," RICS said.

"This policy would discourage households from taking on excessive debt out of fear of missing out on a price boom, and discourage lenders from rushing to relax their lending standards as they compete for market share."

The industry group notes that limits on property price inflation have been used by a variety of countries, including Canada between 2008 and 2012, when Bank of England Governor Mark Carney headed the country's central bank.

Speaking to a committee of MPs on Thursday, Mr Carney said the Bank was "acutely aware" of the potential threats and was watching the housing market closely as it recovers.

But he insisted the market pick-up should be seen in context and remains a third to a quarter below pre-crisis levels.

The Council of Mortgage Lenders added that talk of a housing boom was "premature".

In its regular "news and views" release, it said that while the housing and mortgage markets are showing "some initial signs of recovery this summer", current house sales were still at lower pre-crisis levels.

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Twitter IPO: Firm In Stock Market Launch Bid

A Bite-Sized History Of Twitter

Updated: 4:46am UK, Friday 13 September 2013

Twitter came to life on March 21, 2006 when co-founder Jack Dorsey's account (@jack) automatically sent out the first tweet, which read: "just setting up my twttr."

Dorsey followed it up with the first "human-generated" tweet: "inviting coworkers."

Since then, more than 170 billion tweets have gone out worldwide, and Twitter has 500 million users, according to Dashburst.com, a website that monitors the social media industry. Officially, Twitter has only said it has "well over 200 million" users.

Here are some more Twitter facts: 

:: Justin Bieber (@justinbieber) has the most followers with 44,418,729, as of 11pm UK time on Thursday, followed by Katy Perry (@katyperry) with 42,603,233 and Lady Gaga (@ladygaga) with 40,094,580.

:: US President Barack Obama (@barackobama) is fourth with 36,493,643 followers; the announcement of his re-election victory in November 2012 was re-tweeted 802,624 times.

:: The average Twitter user has 208 followers and spends 170 minutes on the site every month.

:: There are more than 200 million active Twitter users, with 80% of all users access Twitter on mobile devices.

:: China is the country with the most Twitter users with 35.5 million, according to Dashburst.

:: About 20 million Twitter accounts are believed to be fake.

:: The hashtag (#) feature on Twitter which groups tweets by subject debuted in August 2007, proposed by a user.

:: In October 2009, Google and Microsoft began integrating tweets into their search products.

:: In January 2013, Twitter introduced Vine, which enabled users to make and tweet six-second looping videos. Some 12 million Vine videos are uploaded every day.

:: In July, 2013, Twitter was criticised for not taking stronger and swifter action against women who became the target of rape and death threats, and subsequently admitted to failing the victims.

:: Twitter is based in San Francisco, with additional employees in New York, Chicago, Los Angeles and Washington. Its total payroll exceeds 900.

:: Twitter was incorporated in April 2007; it was co-founded by Biz Stone, Evan Williams and Jack Dorsey -- @biz, @ev and @jack.

:: The initial Twitter logo was created by Stone, a former graphic designer.

:: Twitter chief executive Dick Costolo is a former improvisational comedian.

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Sports Direct Enters Market's Premier League

Sports Direct and the bottling company, the Coca-Cola HBC has joined the FTSE 100.

In its quarterly review, the London Stock Exchange revealed the companies that were promoted and relegated from the premier league of the London share market. 

Serco Group, is to leave the UK's leading index and enter the FTSE 250 Index. The outsourcing company has seen its share price drop by more than 20% since July having been accused of fraudulent conduct over the transportation of prisoners. It is undertaking an internal review into the matter.

Another company demoted in the reshuffle is the Kazakh mining company, Eurasian Natural Resources. It leaves after its minority shareholders accepted an offer from its founders to take the company private.

New entrant Sports Direct is the UK's largest sporting goods retailer and has seen gross profits for the three months to the end of July rise by 23%.

Greek coke bottler, Coca-Cola Hellenic Bottling Group which switched its listing from Athens in April due to lack of liquidity has joined the blue-chip list alongside packaging company Mondi.

Coca-Cola HCG told Sky News:

"Inclusion in the FTSE 100 and FTSE All–Share indices will benefit our shareholders and the company by giving us access to the largest pool of international investors, on the most liquid equity market in Europe.

"This marks another achievement for our organization and we are very pleased with the decision by the FTSE EMEA Regional Committee."

All changes will be implemented at the close of business on Friday, September 20 and take effect from the start of trading on Monday, September 23 2013.

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Royal Mail Secures £1.4bn Debt Deal

By Mark Kleinman, City Editor

Royal Mail has lined up borrowing facilities totalling £1.4bn to smooth a historic privatisation deal that is expected to be launched by Government ministers on Thursday.

Sky News can exclusively reveal that the state-owned postal operator has secured agreement from a syndicate of banks for two separate debt facilities worth £800m and £600m.

The new arrangements are designed to help Royal Mail secure sufficient funding to see it through its early years as a company majority-owned by private investors for the first time in its near-500-year history.

Details of the debt facilities, which will support Royal Mail's working capital requirements, will be contained in a document known as an Intention To Float announcement.

The timing of the privatisation statement had still not been officially confirmed on Wednesday night, but people close to the situation said it was almost certain to be made on Thursday before the opening of stock markets in London.

Vince Cable, the Business Secretary, and Michael Fallon, the Business Minister, are expected to take to the airwaves to explain their decision to inject private capital into Royal Mail despite the threat of industrial action from restive trade unions.

The sell-off of the company by issuing shares to institutional and retail investors is likely to value it at roughly £3bn, making it the biggest UK privatisation for decades.

It will also be among the most contentious sales of state assets ever undertaken, following a string of failed attempts by previous governments.

Royal Mail's new ability to borrow at commercial rates from banks will be viewed as significant by prospective City investors because the company has relied in the past on the Government to support it financially.

The flotation announcement will also refer to the threat of a strike - on which Royal Mail employees will be balloted next month - but will reflect a pledge made by ministers in recent weeks that they will not allow the privatisation to be derailed, according to people familiar with the statement.

Sky News disclosed last week that Royal Mail would commit to a generous dividend policy in order to entice investors to back the flotation.

The company is expected to make a commitment to a specific shareholder payout for the current financial year, as well as a general intention to distribute up to about 50% of its profits in the form of dividends in subsequent years.

"This will be an income stock for investors despite the continuing decline in the company's core letters business," said a person close to the group earlier this week.

Royal Mail directors are understood to have agreed to the dividend pledge along with other details of the initial public offering at a board meeting on Wednesday morning.

Postal operators in other European markets tend to pay out at least 40% of their earnings in dividends although Royal Mail would be expected to retain a major chunk of its future profits as it continues to invest in the modernisation of the company.

The company's flotation will include an eventual distribution of 10% of Royal Mail shares to 150,000 of its employees and an offer of shares to ordinary retail investors. At an overall company valuation of £3bn, the employee shares would be worth in the region of £2000 per person.

Royal Mail's profit more than doubled to just over £400m in the year to March as the modernisation plan of Moya Greene, chief executive, gathered pace.

Ms Greene will address opponents of the privatisation when she meets CWU members in Birmingham on Thursday.

The union is seeking a better deal on pay and conditions for Royal Mail's workforce than the 8.6% basic pay rise offered by company executives.

Royal Mail and the Department for Business, Innovation and Skills declined to comment.

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OFT Verdict Paves Way For Osborne Banks Sale

By Mark Kleinman, City Editor

Competition regulators are expected to deliver a massive boost to George Osborne on Wednesday when they rule that branch disposals by Britain's two big state-backed banks are broadly sufficient to enhance competition.

Sky News has learnt that the Office of Fair Trading (OFT) is likely to say that plans for Lloyds Banking Group and Royal Bank of Scotland (RBS) to offload almost 1000 branches between them do not require significant augmentation.

The move will pave the way for the Chancellor to declare another milestone in his reform of the British banking system and begin the sale of the taxpayer's 39% stake in Lloyds.

Treasury insiders confirmed a Sky News report last weekend that said Mr Osborne was actively looking to commence the sale process this week.

The OFT is expected to have taken soundings from Brussels before declaring its satisfaction with the size of the disposals by Lloyds and RBS, which is expected to sell more than 315 branches primarily serving small and medium-sized companies (SMEs).

Dubbed 'Project Rainbow', RBS has lined up three rival bidders for its network and is expected to decide on a preferred offer this month.

In a speech in June, Mr Osborne said he had asked the OFT to conduct a review of the SME banking market, which is expected to report its full findings later in the year.

"As part of this work, I have asked the OFT to review the impact that new challenger banks created by Lloyds and RBS will have on strengthening competition in small business banking, and to identify what more can be done," Mr Osborne said.

Mr Osborne had asked for a review of the SME banking market

Lloyds is in the process of carving out more than 630 branches as a standalone network using the TSB brand, which it relaunched on Monday. The network has a relatively small presence in small business banking.

Insiders said the fact that Lloyds would not be forced to sell a much larger number of branches would fuel further momentum in the bank's share price.

The stock touched a 12-month high on Tuesday and closed in excess of the level paid by the last Labour government to rescue the bank in 2008.

"The [Lloyds share] price is very attractive now," said a person close to a prospective sale of part of the Government's Lloyds stock.

The exact size or terms of the shareholding likely to be offloaded were unclear on Tuesday night although insiders said it was unlikely that Mr Osborne would want to sell less than £5bn, or about 10% of Lloyds' equity.

They said a deal could be announced as soon as Wednesday afternoon.

Such a deal would possess huge symbolic significance as the Government seeks to shed the legacy of the 2008 bail-outs, having sold Northern Rock to Sir Richard Branson's Virgin Money in 2011.

A sale of the Government's shares in RBS will take much longer as Mr Osborne considers a more fundamental overhaul of the bank.

Lloyds and RBS declined to comment.

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HS2 Rail Link 'Will Boost Economy By £15bn'

The HS2 high-speed rail project will boost the UK economy by £15bn and will be completed within its £42.6bn budget, the Government is to claim.

New research shows the proposed link between London and cities in the Midlands and northern England will drive growth in the regions.

The announcement by Transport Secretary Patrick McLoughlin comes in the week the Commons spending watchdog issued a scathing report on the scheme.

It said the apparent benefits were dwindling as the costs spiralled.

Ministers' case for the massive project was based on "fragile numbers, out-of-date data and assumptions which do not reflect real life" with no evidence that it would aid regional economies rather than sucking even more activity into London, said the Public Accounts Committee report.

But Mr McLoughlin will point to a new analysis by KPMG, commissioned by HS2 Ltd, which shows that the boost to Birmingham's economy will be equivalent to 2.1% to 4.2% of the city region's GDP, there will be a 0.8% to 1.7% benefit to Manchester, 1.6% for Leeds and 0.5% for Greater London.

The proposed HS2 lines

"It addresses that vital question: will HS2 create jobs and growth in the North and Midlands, where they are needed most? The answer is absolutely clear. Yes," he will say.

The Exchequer could benefit from £5bn a year in extra tax receipts as a result of the boost to the economy, KPMG said.

The Transport Secretary's speech forms part of a campaign announced by David Cameron to make the case for HS2 in the face of what he called an "unholy alliance" of sceptics.

Recent critics have included Labour's Alistair Darling who first approved it as chancellor, and the Institute of Directors which dismissed it as "a grand folly".

It is also fiercely opposed by some Tory MPs - many representing communities which will be disrupted by construction work and train noise along the route.

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Royal Mail Sale: Thursday Delivery Target

Some of the City's most prominent fund managers are lining up to back the £3bn privatisation of Royal Mail as ministers target Thursday morning to press the button on the historic sell-off.

Sky News understands that Lansdowne Partners and Standard Life Investments are among the City institutions which have provided positive indications of their appetite to invest in the company despite the looming threat of the first national strike by Royal Mail staff since 2009.

The pair is among scores of prospective investors with which the postal operator's executives and advisers have held discussions in recent months as the Government attempted to build enthusiasm for the initial public offering.

Investment bankers involved in the deal say they are surprised at the extent of the positive reaction to their initial soundings with investors, although the actual demand for shares will depend to a large extent on how they are priced.

Ministers are likely to take a final decision on Wednesday evening to press ahead with the privatisation, which will take place through a stock market flotation in London next month. A statement formally known as an Intention To Float announcement is expected at 7am on Thursday.

A spokeswoman for the Department of Business, Innovation and Skills insisted on Monday that no final decision had been taken about the timing of a deal. Other external factors such as the crisis in Syria and an impending announcement about the sale of part of the Government's stake in Lloyds Banking Group could yet alter the Royal Mail timetable, insiders said.

Strikes could be a major obstacle to privatisation plans

However, ministers have made it clear that they will not allow the Royal Mail privatisation to be distracted by the robust stance of trade unions.

Sky News revealed last week that Royal Mail would commit to a generous dividend policy in order to entice investors to back the flotation, with a commitment to a specific shareholder payout for the current financial year, as well as a general intention to distribute up to about 50% of its profits in the form of dividends in subsequent years.

"This will be an income stock for investors despite the continuing decline in the company's core letters business," said one person close to the group.

Royal Mail's board is understood to have backed the dividend pledge in principle and will meet on Wednesday to agree further details relating to the privatisation.

Postal operators in other European markets tend to pay out at least 40% of their earnings in dividends although Royal Mail would be expected to retain a large chunk of its future profits as it continues to invest in the modernisation of the company.

The company's flotation will include an eventual distribution of 10% of Royal Mail shares to 150,000 of its employees and an offer of shares to ordinary retail investors.

Royal Mail declined to comment on Monday.

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Jaguar Land Rover To Create 1,700 New Jobs

Jaguar Land Rover has announced 1,700 new jobs are to be created at its Solihull factory as part of a £1.5bn investment in new technology.

The money will be used to develop an innovative aluminium chassis for future models.

The news was revealed by chief executive Dr Ralf Speth at the Frankfurt Motor Show.

"Today's announcement signals Jaguar Land Rover's ambitions to push the boundaries and redefine premium car ownership," he said.

"At Jaguar Land Rover we place the customer at the heart of everything we do and the introduction of a world class all-new aluminium vehicle architecture means we will be more competitive, flexible and efficient delivering exciting new products for our customers around the world."

JLR's first model to have the new architecture will be a Jaguar sports sedan which is due for launch in 2015.

It will also feature the first engine to be built at a new £500m Engine Manufacturing Centre near Wolverhampton.

Jaguar also unveiled its first ever sports crossover concept vehicle, the C-X17, which will also have the new aluminium technology.

The new jobs at the Solihull site in the Midlands bring the total number announced by JLR over the last three years to almost 11,000.

UK Business Secretary Vince Cable said: "Jaguar Land Rover has been experiencing great success over the last couple of years but this ground-breaking project takes Jaguar onto the next level.

"This all-aluminium architecture project typifies the type of innovative and high value R&D that the UK excels in and Government is supporting through the automotive industrial strategy."

The company, which is owned by Tata Motors, has three advanced manufacturing facilities in the UK - in Solihull and Castle Bromwich in the West Midlands, and Halewood on Merseyside.

JLR's Solihull site has been home to Land Rover since production commenced in 1948 and currently builds the Defender, Discovery, All-New Range Rover and Range Rover Sport.

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TSB Makes Return To The High Street

By Poppy Trowbridge, Business and Economics Correspondent

The Trustee Savings Banks, or TSB, reopens on the high street as a stand-alone banking brand today for the first time since its 1995 merger with Lloyds Bank.

The Lloyds Banking Group must shed hundreds of branches under the revived brand name to meet competition rules set by the European Commission.

TSB will open 631 branches across England, Scotland and Wales with 4.6 million customers transferred from Lloyds in the process, making TSB the seventh largest bank in the UK.

The new bank's mission statement says: "TSB will be different from other banks in that it is purely focused on individuals, families and local businesses in the communities we serve across Britain."

Lloyds chief executive Antonio Horta-Osorio described the business as a "completely clean bank" untainted by the turbulence that has threatened to overwhelm the financial sector in recent years.

It is understood that the new TSB bank may seek to sell shares to the public in 2014 to become fully separate from the Lloyds Group.

Government bailouts of both Royal Bank of Scotland and Lloyds Banking Group, as well as, the merger of Lloyds with HboS led the European Commission to rule that RBS and Lloyds must dispose of a large numbers of their branches to redress any competitive advantage they would have as a result of their increased size.

Kevin Mountford, head of banking at MoneySuperMarket, said: "The creation of TSB, and other new banks such as Tesco Bank, Virgin Money, and Metro Bank help make the banking sector more competitive, which can only be good news for consumers as the big four banks still hold the vast majority of accounts."

He added: "This brand has scale and security that comes with being a big bank.

"I would hope that TSB will differentiate themselves from the Lloyds Banking Group in terms of product innovation, otherwise we may just see another big bank on the high street."

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Osborne: 'UK Economy Is Turning A Corner'

George Osborne will say the UK economy is "turning a corner" and that his austerity programme "is working" in a speech later today.

The Chancellor will argue that a run of strong figures suggests the Government has won the economic argument over his critics who wanted him to change course from his Plan A.

He will hail "tentative signs of a balanced, broad based and sustainable recovery" and warn of the need to make "many billions" more in savings after the next election.

But he will insist that the last few months - which have seen growth forecasts revised upwards amid a number of positive indicators - had "decisively ended" questions about his deficit-reduction strategy.

Addressing an audience of academics, think tanks and businesses in London later, Mr Osborne will say: "The plan is working, but the recovery is still in its early stages, plenty of risks remain, and more years of hard decisions lie ahead.

"Our economy is turning a corner, but we must not take anything for granted.

"This is a hard, difficult road we have been following. But it is the only way to deliver a sustained, lasting improvement in the living standards of the British people."

He will add: "More tough choices will be required after the next election to find many billions of further savings and anyone who thinks those decisions can be ducked is not fit for government."

Labour has dismissed the Chancellor's speech as a "desperate attempt to rewrite history".

"Three wasted years of flatlining under George Osborne have left ordinary families worse off and caused long-term damage to our economy," shadow Treasury minister Chris Leslie said.

"This desperate attempt to rewrite history will not wash when on every test he set himself, this Chancellor's plan A has badly failed - on living standards, growth and the deficit."

Opposition leader Ed Miliband is expected to use his speech to the TUC conference to lambast the Chancellor for being "out of touch with ordinary families" by celebrating while they face the squeeze.

Mr Osborne has been buoyed by revised gross domestic product figures showing the UK economy grew by 0.7% in the second quarter of the year, with predictions it could reach 1% for the third quarter.

The respected OECD think-tank has almost doubled its prediction for UK growth this year to 1.5%.

Rising property prices and a summer retail splurge as well as booming car sales have also contributed to the feel-good factor, with surging manufacturing figures for June also helping fuel the improved mood.

Goods exports excluding oil plunged however by 9.3%, and the overall trade deficit more than doubled from £1.3bn to £3.1bn, with real terms wages also in decline.

The economy remains 3% below its pre-crisis level.

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Osborne Ready To Press Button On Lloyds Sale

By Mark Kleinman, City Editor

George Osborne, the Chancellor, is considering selling part of the Government's stake in Lloyds Banking Group as soon as next week amid rising expectations in the City of a multi-billion pound share placing.

People close to the situation say that the Treasury, Lloyds and UK Financial Investments (UKFI), which manages the taxpayer's stakes in the UK's bailed-out banks, are discussing the prospect of a share sale that could take place within days.

Reports this week that a disposal of part of the Treasury's holding would almost certainly be delayed by concerns over the crisis in Syria were dismissed by Treasury insiders.

They acknowledged, however, that broader market risks, which also include the US Federal Reserve's forthcoming decision about whether to slow the pace of monetary stimulus, remained an "obvious factor in a decision".

"The reality is that a final decision about the timing of a sale hasn't been made yet but selling next week is a definite option," said one.

Sky News understands that:

:: JP Morgan, the investment bank advising UKFI on its privatisation strategy, has told the Treasury agency that a profitable sale for the taxpayer would be possible within days based on its assessment of the appetite for Lloyds shares among major institutional investors.

:: A number of major City shareholders have this week encouraged the Government to initiate a sale following the agreed takeover of Vodafone's stake in Verizon Wireless, which will see tens of billions of pounds returned to UK investors.

:: A share placing is unlikely until later in the week at the earliest as Lloyds' managers focus on the successful spin-off of TSB into a standalone banking network on Monday.

:: Aides to Mr Osborne are determined to realise a return from part of the Lloyds stake before the Conservative Party holds its annual conference in Manchester next month. One said that recent improvements in the economic outlook allied to the imminent privatisation of Royal Mail and a sale of taxpayer-owned bank shares were part of "a narrative" that would bolster perceptions of the Chancellor's stewardship of the economy.

:: Senior Liberal Democrats are seeking assurances over Lloyds' future role in lending to small and medium-sized companies before they endorse any sale of Lloyds shares, according to Coalition sources.

The exact size of an initial Lloyds sale has not been determined, although analysts believe it is likely to account for roughly 10% of the bank's shares, or one-quarter of the Government's stake. That would be worth just over £5bn at today's share price just before the market close of 75.41p.

During the last 12 months, Lloyds shares have more than doubled as investors have begun to price in the bank's likely future profitability and potential shareholder returns.

In meetings with investors following last month's interim results, Antonio Horta-Osorio, Lloyds' chief executive, is understood to have pledged that the bank would seek to pay out up to 70% of its profits in dividends within three years.

Lloyds has been prohibited from paying dividends to ordinary shareholders since its £20bn bailout in 2008, which followed its takeover of the stricken mortgage lender HBOS.

Mr Horta-Osorio told Sky News this week that it was "the right thing" for the Chancellor to begin selling Lloyds shares.

The price of any Government placing of Lloyds shares would be crucial to Mr Osborne's presentation of a sale. The Labour government paid an average market price of 73.6p for the stake, and while an imminent placing may not take place above that level, it would be possible to do so for a price well in excess of the 61p at which the stake is recorded in the national accounts.

The lower figure does not take into account £2.5bn of fees paid by Lloyds for implicit guarantees covering its toxic loans in the wake of the 2008 rescue.

The Treasury, Lloyds and UKFI all declined to comment on Saturday.

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Unemployment Figure Could Be Double, TUC Says

Unemployment could be almost double the headline figure of 2.5 million when groups such as the economically inactive are added, the Trade Union Congress has claimed.

According to the TUC, as well as the 2.5 million official jobless figure, a further 2.26 million people want a job but are not classified as unemployed.

A report published ahead of the TUC Congress which opens in Bournemouth on Sunday said wider forms of unemployment should be given the same level of importance in the UK as in the US.

General secretary Frances O'Grady said: "Unemployment may have started to fall in recent months but we are still in the midst of a job crisis.

"The true scale of unemployment is far bigger than official figures suggest, as nearly five million people say they want work today.

"With a further 1.4 million people only able to find part-time work, despite needing a full-time job to get by, it's clear that our labour market remains far from full healthy.

"We know that the recent fall in unemployment has been driven by short hours, low pay, temporary contracts, and jobs that offer no guarantee of paid work at all.

"These types of jobs cannot form the basis for a secure and sustainable economic recovery."

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