Borrowers are not ready for higher interest rates and could struggle to pay the bills even with a small rise in repayments, RBS chief Ross McEwan warned yesterday. Most RBS and NatWest mortgage borrowers had never experienced an interest rate rise, he said, and nationally more than 1.5m borr­owers bought their house after 2007 when rates last went up. He is setting up a task force headed by RBS senior economist Sebastian Burnside to study the impact of a rate rise, and come up with a plan to prepare borrowers.

Slaughter and May, Clifford Chance (CC) and Hogan Lovells have won advisory roles on pubs giant Punch Taverns’ £2.3bn debt refinancing, LegalWeek reported. Punch, which began talks on its restructuring nearly two years ago, received the approval needed for its restructuring proposals from the Royal Bank of Scotland (RBS) and Lloyds Bank last week. The deal, which has reduced net debt by £600m to £1.5bn, included a debt-for-equity swap that has given bondholders 85% of the company’s equity.

Two independent directors on the board that oversees HSBC’s British business may leave the bank over stricter rules aimed at holding bankers more accountable for reckless actions that may lead to the failure of a lender, according to a person with direct knowledge of the matter, the International New York Times DealBook blog reported. Alan Thomson, a member of the audit and risk committees at HSBC Bank, has tendered his resignation and will leave the bank later this month, said the person, who was not authorized to discuss the matter publicly.

R3 has called for reforms to legal funding for insolvency cases, returning money from rogue directors to creditors, the treatment of small business creditors in football insolvencies, the government's approach to being a creditor in insolvencies and a comprehensive update of the personal insolvency regime, Accountancy Age reported. Every year, £160m is returned to creditors (mainly small businesses and HMRC) as a result of legal action against directors of insolvent companies who have wrongly, negligently, or fraudulently taken creditors' money.

A former senior banker at a leading British bank became the first person in Britain to plead guilty to a criminal charge in a continuing inquiry into the manipulation of a global benchmark interest rate, the International New York Times DealBook blog reported. The former banker pleaded guilty to a single count of conspiracy to defraud in connection with manipulating the London interbank offered rate, or Libor.

UK short-term lender Wonga is writing off the debt of around 330,000 customers worth about 220 million pounds ($356 million), after being forced to overhaul its lending practices by Britain's financial regulator, Reuters reported. The Financial Conduct Authority (FCA) said on Thursday Wonga had entered into a so-called voluntary requirement agreement to make the changes, which ensures immediate redress for consumers while allowing the regulator to continue investigations and possible enforcement action.

Factories in Britain and Germany suffered a sharp slowdown in September, raising fears that economic recovery is losing momentum against a backdrop of global political turmoil and the flagging eurozone economy, The Guardian reported. In the UK growth in manufacturing activity was the slowest in 17 months as demand for British goods waned at home and abroad. In Germany, long the powerhouse of the eurozone, the sector shrank for the first time in 15 months, hit by Russian sanctions over the Ukraine crisis and general malaise across the economies of the currency bloc.

The Royal Bank of Scotland said Tuesday that its outlook continues to improve as the British lender benefits from further declines in charges for bad loans, the International New York Times DealBook blog reported. The bank, which is 81 percent owned by the British government, said that it expected to “significantly outperform” its prior guidance for the 2014 fiscal year. The bank had expected to record about 1 billion pounds, or about $1.6 billion, in charges for bad loans this year. It did not provide an updated figure.

The Lloyds Banking Group said today that it had terminated the contracts of eight individuals and clawed back about £3 million in bonuses after its settlement of inquiries into the manipulation of global benchmark interest rates, the Irish Times reported. In July, Lloyds agreed to pay more than $380 million to British and US authorities to resolve investigations into the manipulation of rates, including one used to determine fees paid by Lloyds related to a £17 billion taxpayer-backed bailout during the financial crisis.

U.K. Treasury chief George Osborne said Monday that the Conservative Party would cut billions of pounds more of public spending to tackle the deficit, part of a tough-on-the-economy message the party hopes will win over voters in the 2015 general election, The Wall Street Journal reported. Mr. Osborne, who made the announcement in a speech to the center-right party's conference, is looking to draw the battle lines with the main opposition Labour Party over the economy ahead of the election in May.