The European Union sought to patch up differences with Britain over financial regulation, saying on Tuesday there was room for exemptions in a draft European banking law to accommodate stricter local supervision of lenders, Reuters reported. Jonathan Faull, head of the European Commission's financial services unit, said it was a matter of crafting exemptions in the draft EU bank law so Britain, Sweden and others can tailor their local supervision.

British retailers suffered their second weakest January since records started in 1995 as shoppers reined in spending after splashing out on December discounts, a British Retail Consortium survey showed on Tuesday, Reuters reported. The value of retail sales on a like-for-like basis - a measure favoured by equity analysts - was 0.3 percent lower on the year after a 2.2 percent rise the previous month. Total sales, which include new floor space and are closer to the measure used in Britain's official statistics, grew 2.1 percent, down from a 4.1 percent annual rise.

The government this week pressured one banker to give up his bonus and humiliated another by stripping him of his knighthood, populist moves that may assuage taxpayer anger over propping up failed banks, but risk long-term damage to the City financial district, Reuters reported. Britons, facing bleak job prospects, rising prices and harsh state spending cuts, are incensed at huge executive pay packages, in particular bonus payouts to bankers many blame for triggering Britain's worst recession since World War Two.

Credit card and other unsecured lending to British consumers posted its sharpest drop in nearly two decades in December, supporting expectations that the Bank of England will soon inject more cash into the economy to prevent a deep recession, Reuters reported. A steep decline in money supply also added to views that 75 billion pounds in quantitative easing, or asset purchasing, launched in October are not enough to boost the economy, which may have already entered a mild recession at the end of last year.

The U.K. government's proposed reforms to public sector pensions are unlikely to save any money over the long-term, a report from an influential think tank said Tuesday, casting doubt on the government's claim that the changes will save "tens of billions of pounds" over the next few decades, The Wall Street Journal reported. The government and unions have been locked in protracted negotiations for more than a year over the plans to make public sector workers retire later and contribute more towards their pensions.

Britain should be relaxed about being "out of the room" when Europe discusses euro zone issues, Prime Minister David Cameron said on Thursday, dismissing any prospect of signing up to a new treaty with other EU states to enforce stricter budget controls, Reuters reported. Cameron infuriated other European Union members last month and sparked speculation about Britain's place in the bloc it joined in 1973 by blocking an EU treaty change and forcing euro zone countries to negotiate a fiscal accord outside the Union.

U.K. steel producer Thamesteel, which is owned by Saudi-based Al-Tuwairqi Group, has entered into administration after failing to secure an investor to rescue it from financial difficulties, members of the Community Union said Wednesday, Dow Jones DBR Small Cap reported. Thamesteel "had planned an investor for the site but that fell through today and consequently the company has been put into administration," said a Community Union spokesman.

Britain's economy may have entered a mild recession in the last three months of 2011, hampering the government's core policy aim of spurring growth and raising the chances that the Bank of England will inject more cash soon, Reuters reported. Britain's recovery from the 2008/2009 recession - the deepest since the depression-hit 1930s - has already been sluggish, and unemployment has crept up to a 17-year high as the government cuts spending deeply to erase a huge budget deficit.

The Bank of England stands ready to engage in further stimulus and extend support to lenders facing funding shortages in order to shepherd the U.K. economy through a new global slowdown, BOE Governor Mervyn King said Tuesday, The Wall Street Journal reported. Mr. King told an audience in Brighton, England, that the U.K. faces an "arduous, long and uneven" recovery in the years ahead as it attempts to work off its debts and rebalance its economy away from debt-fueled spending towards exports and investment. This will not be an easy year, Mr. King said.

Switzerland-based refiner Petroplus Holdings AG plans to file for insolvency, after talks with its lenders failed to unblock credit lines and the company succumbed to the weak profit margins that have dogged the sector in Europe during the past year, The Wall Street Journal reported.