Morning papers: Markets bet on rate rise two years early

Investors have become so confident in the apparent momentum in the British economy that they now expect the first rise in interest rates to come almost two years earlier than the Bank of England indicated last month, reports the Financial Times.

Market interest rate expectations suggest the bank’s Monetary Policy Committee will disregard its “forward guidance” and hike the 0.5 per cent rate in the final months of 2014 or the beginning of 2015 rather than in the back end of 2016, after strong data has transformed the economic outlook.

IMF warns Norway over housing bubble

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Norway has one of the biggest housing bubbles in the world with prices overvalued by up to 40 per cent, according to the International Monetary Fund, reports the Financial Times.

In its latest assessment of the oil-rich Nordic country, the IMF increased its estimate of how much Norwegian house prices are overvalued from 15-20 per cent in its previous report in 2011.

Europe should delay bonus rules until 2015, says BBA

The British Bankers’ Association (BBA), the lobby group of the UK banking industry, said plans to introduce bonus curbs for next year could prove “impossible” and recommended the rules be postponed until 2015, reports The Daily Telegraph.

Under the proposed rules, the bonuses of staff earning more than €500,000 (£422,585) working for banks based in the European Union will be capped at twice their base salary.

Customers say no to bank that likes to say yes in Lloyds TSB row

Four thousand Lloyds Banking Group customers assigned to its carved-out bank TSB, which officially launches on Monday, have asked to stay with Lloyds, reports The Times.

More than 4.6 million personal customers at 631 Lloyds TSB and Cheltenham & Gloucester branches are being transferred to the revived TSB brand, with the operation being floated as a separate business next summer.

Go-Ahead boss says rail companies not profiteering

Go-Ahead’s dip in profits is evidence that rail franchising is not sucking money out of the system, the transport group’s boss said.

David Brown, chief executive of Go-Ahead, said the group was meanwhile making progress towards its target of £100m in annual profits from its combined bus divisions, reports The Guardian.

Go-Ahead reported overall pre-tax profits of £86.2m for 2012-13, down 8 per cent on last year