With no room to spend its way back to growth in next week's budget, Britain's government is straining to find creative ways to boost the economy and betting on new schemes aimed at helping the private sector spark recovery, Reuters reported. But chancellor George Osborne's much-vaunted plans to boost bank lending to small businesses and encourage pension funds to invest in Britain's creaking infrastructure look set to be tarred with disappointment before they are even launched.

Britain's unemployment rate held at a 16-year high in the three months to January and the youth unemployment rate rose to a record high, piling pressure on the government to introduce policies to boost growth and jobs in next week's budget, Reuters reported. Unemployment on the broader ILO measure inched down to 2.666 million for the November-January period from 2.671 million in the three months to December, but the overall rate held at 8.4 percent, a rate that prior to recent months was last equalled in the three months to January 1996.

With no room to spend its way back to growth in next week's budget, Britain's government is straining to find creative ways to boost the economy and betting on new schemes aimed at helping the private sector spark recovery, Reuters reported. But chancellor George Osborne's much-vaunted plans to boost bank lending to small businesses and encourage pension funds to invest in Britain's creaking infrastructure look set to be tarred with disappointment before they are even launched.

Royal Bank of Scotland and former directors including ex-chief executive Fred Goodwin and ex-chairman Sir Tom McKillop have been hit with a £2.4 billion ($4.6 billion) legal claim from angry investors in the taxpayer bailed-out bank, The New Zealand Herald reported. RBOS Shareholders Action Group was due to deliver claims letters to the bank and 17 former directors, including the former head of investment banking Johnny Cameron.

Struggling British video games retailer Game, denied new titles by suppliers, has put itself up for sale and warned shareholders their equity in the firm could be worthless, Reuters reported.

Barclays PLC cut Chief Executive Bob Diamond's pay packet by a third to £6.3 million ($9.97 million) in 2011, as a series of major U.K banks lowered executive bonuses amid weakening competition to retain top talent in the sector and glum financial results, The Wall Street Journal reported. In its annual report, Barclays said it cut its total 2011 remuneration for top executives and directors by 22% to £62.2 million compared with a year earlier. Bonus pay at Barclays's investment-banking arm fell by around a third to £1.74 billion. Mr.

British banks are in denial over their failure to deal with the financial crisis and the need to restructure their existing banking model, the Governor of the Bank of England Mervyn King said in a newspaper interview on Monday. King said Britain's banks blamed him for not offering more support during the crisis because they could not "face up" to their own failures and the need for a restructured model, Reuters reported. "I think it is because they found it very, very difficult to face up to the failure of their banking model.

An arcane system at the heart of a global investigation into whether banks colluded in setting interest rates may endure simply because it is so deeply embedded in trillions of dollars' worth of financial contracts, Reuters reported. The London Interbank Offered Rate, known as Libor, is a daily poll that asks a group of banks at what rate they think they will be able to borrow. The rate is supposed to reflect the level at which banks lend to one another.

It’s hard to tell sometimes who is calling the shots at the Royal Bank of Scotland: management or politicians, The New York Times DealBook blog reported. When Britain bailed out the financial firm in 2008 and took a majority stake, the government promised to remain a passive investor. But some employees and analysts now say the line has blurred, as politicians push the bank to rein in executive compensation, bolster lending and limit risky businesses.

The cost to pension industry of the Bank of England's latest round of quantitative easing could total 90 billion pounds ($141 billion), diverting company cash away from investment in the economy in order to plug retirement fund deficits, the industry warned on Thursday, Reuters reported. Quantitative easing (QE) depresses the yield on government bonds, known as gilts, a staple investment for pensions funds, making it more expensive to pay for future liabilities, the National Association of Pension Funds (NAPF) said.