LONDON (ShareCast) - Investors have bet that the Bank of England will have to raise interest rates as many as three times before the end of the year.

Swap rates - the key money market measure reflecting traders' expectations for borrowing costs - rose at the fastest rate since Black Wednesday 16 years ago after a "shocking" rise in factory gate inflation. In scenes described by one observer as "carnage", traders embarked on a massive sell-off of UK government bonds, pricing in the likelihood that the Bank's Monetary Policy Committee will lift the official base rate to 5.75% by the end of the year, reports the Telegraph.

British Energy rebuffed a £10bn-plus takeover offer from EDF last night, arguing that recent increases in wholesale energy prices justified a valuation higher than that proposed by the French energy group last month. A statement from British Energy said that it had received a number of proposals but none had been above its closing share price on Friday of 735p, which valued the company at £11.8bn, writes the Times.

Qinetiq chief executive Graham Love and chairman Sir John Chisholm have been labelled as behaving dishonourably and the Ministry of Defence as "an innocent at a table of cardsharps" ahead of a report into the defence company's controversial privatisation. The report, published today by the House of Commons' Public Accounts Committee (PAC), paints a damning picture of the behaviour of QinetiQ's top management, reports the Telegraph.

Candover, the private equity group, is considering making an approach for Informa after news broke that the Lloyd’s List owner and United Business Media are in merger talks. A bid from Candover, the co-owner of Springer Science & Business Media, the German publishing group, would probably be made alongside Cinven, its partner in Springer. Informa previously turned down an offer from Springer at 630p a share at the end of 2006, reports theTimes.

President Bush issued a call for a rise in the value of the US dollar on currency markets yesterday in a signal of mounting official alarm in Washington about the effect of the slumping greenback on the world’s largest economy. In an exclusive interview with The Times on the eve of the United States-European Union summit in Slovenia, Mr Bush expressed concern about the dollar’s continuing weakness and said that he favoured an appreciation in the US exchange rate.

House sales slumped to a 30-year low last month, raising fears that the downturn in the housing market could turn into a crash. Chartered surveyors reported that an average of 17.4 transactions had been completed each month between March and May, down from 18.5 in the three months to April. This is the lowest figure since records began in January 1978, according to the Royal Institution of Chartered Surveyors (RICS), writes the Times.

Lloyds TSB has upped the stakes in the increasingly fierce battle to win new current account customers, increasing its credit interest rate from 4% to 6% to try to bolster its deposit balances. Lloyds announced yesterday that it will now pay interest of 6%on all balances of up to £2,500 for new customers of its Plus accounts, falling back to 4% at the end of the first year, reports the Independent.

NYSE Euronext, the transatlantic exchange group, will on Tuesday step up its efforts to become a one-stop shop for US equity trading in the face of mounting competition by announcing a partnership with Progress Software, a company specialising in advanced trading technology. The partnership will allow traders to use NYSE Euronext as a gateway to other trading venues, says the FT.

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