The boss of one of Britain’s taxpayer-owned banks is being lined up for a bonus of up to £1.5m for last year, refusing to follow the example set by his counterparts at RBS and Barclays, who have both waived their rights to a payout. António Horta-Osório, chief executive of Lloyds Banking Group, said that the final figure would be fixed at the end of the month and insisted that the bank would be “very mindful about the general environment in the UK financial services sector”. The payout is likely to anger MPs, amid mounting multibillion-pound costs to pay for misselling PPI and other insurance products, and the lack of clarity over when the bank will return to the private sector. [The Times]

George Osborne is forcing Royal Bank of Scotland to cut its bankers’ pay to ensure that taxpayers are not left to pick up the cost of the upcoming multimillion-pound fine for Libor rigging. The Chancellor said his views had been made clear to the management of the bailed-out bank in an attempt to defuse public anger about the portion of the fine – which could amount to between £400m to £500m in total – that will be paid to the US authorities. “When it comes to RBS, I am clear that the bill for any US fine related to this investigation should on this occasion be paid for by the bankers, and not the taxpayer,” Osborne said. [The Guardian]

The credit ratings agencies have largely escaped sanction so far for their role as “key enablers” of the financial crisis, but that is expected to change this week when the US Department of Justice files charges against Standard & Poor’s. The agency said that it had received notification from the DoJ that charges would be brought for its alleged failure to properly rate risks associated with sub-prime mortgage products that were sold by the big banks. The DoJ’s decision pushed the share price of McGraw Hill, S&P’s owner, down 14 per cent, to $50.29 yesterday. [The Times]

John Malone’s Liberty Global is preparing to make a bid for Virgin Media, the UK cable operator with an enterprise value of more than $20bn, in a deal that would mark the US billionaire’s biggest move yet into the UK and could set up a fresh clash with his former partner and rival Rupert Murdoch. A bid could be announced in the coming days, according to several people familiar with the situation, and would come more than five years after Liberty Global first considered buying Virgin Media, in which Sir Richard Branson’s Virgin Group still has a 3 per cent stake.

A successful bid for the UK’s second-largest pay television operator would put Mr Malone in direct competition with market leader BSkyB, which is controlled by Mr Murdoch’s News Corp. Virgin Media also offers telecoms services.[Financial Times]

Airlines have told the Chancellor they can help “drag Britain out of recession” if he abolishes Air Passenger Duty (APD) at next month’s Budget. Scrapping the controversial tax, which applies to all passengers flying from a UK airport, would deliver a 0.45pc boost to GDP within 12 months and could generate 60,000 jobs by 2020, according to a report commissioned by British Airways, easyJet, Ryanair and Virgin Atlantic. APD adds £13 to the cost of a short-haul flight, up from £5 in 2007, and as much as £92 in the case of long-haul. Airlines argue it acts as a major barrier to both tourism and potential investment in Britain. [The Telegraph]

Gavin Darby, the incoming chief executive of Premier Foods, lost no time in stamping his mark on the Hovis-maker, sacking his chief operating officer on his first day in the top job. Mr Darby, the former boss of Cable & Wireless Worldwide, announced Geoff Eaton would be leaving the company with immediate effect, despite the fact that he only joined the beleaguered food company in October. Mr Eaton, the former boss of food maker Uniq, will not be replaced, with Mr Darby expected to assume a large portion of his duties. [The Independent]

The UK economy is set to grow by just 0.7 per cent this year, according to the latest forecast from the National Institute of Economic and Social Research (NIESR). The forecast is well below that of the Chancellor’s official budget watchdog, the Office for Budget Responsibility, which sees growth of 1.2 per cent in 2013. For 2014 NIESR predicts growth of 1.5 per cent, versus the OBR forecast of a 2 per cent expansion. The think tank urged the Chancellor to adopt a new fiscal strategy to pep up the economy. “It remains our view that such a recovery would best be supported by a significant increase in public sector net investment, with looser fiscal policy in the short term while demand remains weak,” it said. [The Independent]