The Bank of England broke with tradition on Wednesday, planning to keep interest rates at a record low until unemployment falls to 7 percent or below, which it said could take three years, Reuters reported. Its attempt to steer expectations about future rate moves and bolster a fledgling economic recovery underwhelmed many investors, who brought forward expectations for when rates would rise from 0.5 percent - the opposite of what the central bank was hoping for - although the move faded later in the day.

UK Coal rejected a bid to buy its surface mines and run its deep mines under contract in favour of a restructuring that could cost British companies millions in pension payments, documents show, the Financial Times. The revelation is contained in the report to creditors compiled by PwC, which handled the administration and liquidation of Britain’s largest coal producer, hiving most of its assets into linked businesses. Hargreaves Services, the listed coal miner and importer, is believed to have made the bid on June 5, a month before UK Coal entered administration on July 9.

Asia's economic slowdown is threatening to bring two of Europe's highest-flying banks back down to earth, The Wall Street Journal reported. Standard Chartered PLC Tuesday said net profit fell 24% in the first half of the year, as weakening growth in Asian markets and a $1 billion write-down at its South Korean business put a brake on earnings. The announcement came one day after HSBC Holdings PLC's said underlying profit before tax stagnated at its Asia-Pacific unit, which excludes Hong Kong, and warned it was bracing for slower growth in China.

HSBC Holdings Plc, Europe's biggest bank, said it could take a hit of up to $1.6 billion (1 billion pounds) in a settlement with a U.S. regulator over allegations it mis-sold mortgage-backed bonds during the housing bubble, Reuters reported. The Federal Housing Finance Agency (FHFA), the conservator of Fannie Mae and Freddie Mac, has alleged 18 banks misrepresented the quality of the collateral backing securities between 2005 and 2008. Swiss bank UBS paid $885 million in a settlement with the FHFA last month and Citigroup and General Electric have settled for undisclosed sums.

HSBC, Europe’s biggest bank, today vowed to get round new rules capping bankers’ bonuses which it said would have a “highly damaging” impact on many of its operations around the globe, the Evening Standard reported. From the start of next year, European Union rules within the Capital Requirements Directive (CRD) IV will limit bonuses paid to all bankers employed by EU-based institutions to 100% of their base salary, or 200% if shareholders approve.

Wide disparities in the way European banks calculate risk for their sovereign and top-quality corporate debt holdings stem mostly from variations in regulation and differences in collateral and maturity, rather than any consistent effort to play down potential losses on their balance sheets, the pan-EU banking supervisor has found, the Financial Times reported.

The number of corporate insolvencies increased by 20% in Scotland in the second quarter, in a sign that conditions remain tough for many businesses, The Herald Scotland reported. However, the number of firms going into some form of insolvency proceeding fell by 58% compared to the same quarter last year. Figures compiled by the official Insolvency Service show there were 197 corporate insolvency proceedings in Scotland in the three months to June, up from 164 in the first quarter.

Britain could soon start selling its stake in Lloyds Banking Group after the country's largest retail bank accelerated a turnaround and flagged a return to payouts for shareholders, Reuters reported. Prime Minister David Cameron is keen to show that Britain's part-nationalised lenders are on the mend, and a profitable sale of part of the state's 39 percent stake in Lloyds would allow him to claim at least partial success. Royal Bank of Scotland, the other bank Britain bailed out with billions of pounds of taxpayers' money during the 2008 financial crisis, is still struggling to recover.

Rolling stock repair and refurbishment company Railcare was placed in administration on July 31, with restructuring partners Kim Rayment, Ian Gould and Bryan Jackson from BDO appointed joint administrators, the Railway Gazette reported.

The Bank of England and its new governor Mark Carney will put the finishing touches to a fresh approach to nurturing Britain's nascent economic recovery on Thursday, when the central bank wraps up a policy meeting, Reuters reported. But financial markets will probably have wait a few more days before getting details of the long-awaited steer on how long interest rates are likely to stay at their record low. At his Bank first policy meeting nearly a month ago, Carney surprised investors with a warning that they were pricing in a rate hike too soon.