Lloyds Banking Groupgave fresh impetus to hopes that a recovery was under way in the UK financial sector yesterday as it signalled that bad debt impairments had peaked.

The British bank, which is 43 per cent owned by the taxpayer, said bad debt impairments rose to £13.4bn ($23bn) in the first half of 2009 from £2.5bn last time, after big losses from HBOS, which it acquired last year.