UK government considering HBOS options

Speculation is mounting today that the British government may be preparing to increase its stake in the troubled Lloyds Banking Group, after Chancellor Alistair Darling declined to rule out the option of nationalisation.

The group stunned the City by warning of £10bn (€11.2bn) in annual losses at struggling HBOS, which it rescued with government backing at the height of the financial turmoil last autumn.