News round up: Lloyds Banking Group, Bank of England, Recovery, Carlyle Group and Basel III.

LLoyds Banking Group plc (LON:LLOY) has slammed the number of "bogus" payment protection insurance claims it is facing, after the state-backed lender revealed that 25pc of the PPI claims turn out to be without merit and that about a third of the cases referred to it by claims management companies were for products that never had PPI sold against them. Lloyds has so far paid out about £1.8bn to compensate customers.

In an attack on claims management companies, which Lloyds alleges are responsible for many of the fictitious claims, Antonio Horta-Osorio, the bank's chief executive, said the practice had to end as he accused some managers of fraudulent behaviour. "It is fraud and I think we should stop that," said Mr Horta-Osorio.

His attack came as Lloyds returned to profit in the first quarter of the year, despite facing a spike in claims for PPI mis-selling. The state-backed lender made a pre-tax profit of £288m in the three months, despite having to set aside a further £375m to meet the new PPI claims. The profit compares with a £3.47bn loss in the corresponding period last year, when the bank set aside £3.2bn to compensate customers mis-sold PPI cover, writes the Telegraph.

Bank of England

More than a million people may have lost their jobs unnecessarily because the Labour Government failed to act on warnings from the Bank of England which could have prevented the recession, Sir Mervyn King claims. The Bank governor claimed that action by Gordon Brown’s administration had been "too late" to prevent the banking crisis causing a recession, which led to the sharp increase in unemployment.

Sir Mervyn said that he argued “from the beginning of 2008” that British banks required more than £100bn of extra funding to avert a crisis. Mr Brown and other senior ministers failed to bail out the banks until October 2008, which was "too late to prevent the financial crisis from spilling over into the world economy", he claimed, according to The Telegraph.

Recovery

Britain’s economy is likely to resume growth in the summer with the recovery gaining pace next year, the CBI today forecast. In its latest quarterly outlook, the business lobby group also sees interest rates remaining at their record low of 0.5% until the final quarter of 2013, when it expects a rise.

Among its other predictions, the CBI anticipates that inflation will be "somewhat higher than previously thought" throughout 2012, household spending will remain "subdued" while there will be a "modest rise" in business investment. John Cridland, the CBI director-general, said: "Despite the disappointing GDP estimate for the first quarter from the Office for National Statistics, we still think the UK economy will grow in 2012, with faster growth next year", The Scotsman reports.

Carlyle Group

For a firm that prides itself on fattening companies up for a stock market listing, Carlyle Group has had a surprising struggle with its own flotation. The rivate equity group will begin trading on the Nasdaq exchange in New York today at a market valuation that is nearly $1bn (£620m) lower than it had hoped.

The firm, which owns the RAC recovery service and Dunkin’ Donuts fast-food chain, had been aiming for a share range of $23 to $25 for its initial public offering, which would have valued the group at between $7bn and $7.6bn. However, investor apathy towards private equity floats has forced Carlyle to cut the price to the lower end of the range, with the flotation priced at $22 a share, valuing Carlyle at $6.7bn. The group has sold 30.5m shares in the flotation, roughly 10% of its total equity, and raised $671m, The Times says.

Basel III

George Osborne has warned the European Union that Britain will refuse to sign up to "idiotic" proposals that would water down tough international rules on bank capital requirements. During angry exchanges, the Chancellor told a meeting of Europe’s finance ministers on Wednesday night that EU measures to implement "Basel III" bank rules would be ridiculed by financial markets and the banking sector because it so clearly failed to enforce clear and tough rules. "We are not implementing the Basel agreement as anyone who will look at this text will be able to tell you.

"I’m not prepared to go out there and say something that will make me an idiot five minutes later," he said. After 10 hours of talks, a furious Mr Osborne said that since he had been forced to cancel a Downing Street dinner party he was ready to keep EU finance ministers at the negotiating table all night until they got it right, The Telegraph says.