Payday loans companies are failing to adequately check whether loans will be affordable for borrowers and have been warned by the regulator over "aggressive" debt collection practices, The Guardian reported. The Office of Fair Trading has written to all 240 payday lenders highlighting "emerging concerns" over poor practices in the market, and has opened formal investigations into several payday lenders over how they pursue borrowers who have defaulted on their repayments.

Britain and France are heading for a showdown in Brussels over the next EU budget, amid rising hopes in Downing Street that the debate is shifting in favour of the tough settlement demanded by David Cameron, UK prime minister, the Financial Times reported. Herman Van Rompuy, European Council president, has proposed a compromise budget that approaches Mr Cameron’s demands for a freeze on spending – indeed on one measure he is proposing a cut.

Britain's banks should be forced to fully separate their retail arms from investment banking operations if they try to circumvent new rules designed to protect the taxpayer, a top regulator warned, Reuters reported. Andrew Bailey, head of banking supervision at the Financial Services Authority (FSA), said banks should face the threat of being broken up if they fail properly to comply with proposals to ring-fence retail deposits from riskier activities. Bailey said there was a risk that banks would try to "tunnel under" any ring-fence that was set for them.

British aero engineer Hampson Industries Plc, which has been struggling with a heavy debt load, on Monday said it planned to appoint administrators, less than four months after it terminated a sale process, Reuters reported. The company, which supplies tools and components to planemakers Airbus and Boeing Co, put itself on the block in February but warned that the sale process was likely to result in little or no value to the company's shareholders.

Britain's housebuilders face a dose of harsh economic reality next year as government steps to kickstart sales falter and strategies to bolster their balance sheets run out of steam, Reuters reported. Housebuilders have enjoyed stable sales for 18 months as the government put housing centre-stage in its battle to spark economic growth, with plans like NewBuy and Funding for Lending, and any slump would hit these wider ambitions.

Struggling paper, packaging and signage merchant PaperlinX has announced more restructuring and cost cuts in its business in the United Kingdom in response to depressed trading conditions in Europe, The Australian reported. The company said on Thursday that the UK restructuring would cost $3 million, but combined with cost cuts, would deliver $13 million in annual benefits.

Years of poor governance and mismanagement have turned London's local government pension schemes into a "ticking time-bomb" that could mean a massive bill for taxpayers, a new report has found. The report by think-tank Pensions Institute published on Monday said that by "shopping around" for the most favourable actuarial assumptions, local government pension schemes were understating the real value of their pension liabilities and repeatedly deferring funding recovery plans.

Britain is warning other EU countries that it will block a single eurozone banking supervisor unless those outside the system win more safeguards, as London expresses growing frustration that its demands are being left to last, the Financial Times reported. While David Cameron, the UK prime minister, has said he “does not want to stand in the way” of a eurozone banking union, behind the scenes British diplomats are stepping up calls for urgent progress to be made to resolve their concerns.

Environmental consultancy AEA Technology Group said it plans to appoint administrators for its companies in England and Wales, after failing to resolve debt issues, Reuters reported. AEA - which advises the U.S. Department of Energy, the British government and several companies on climate change and energy issues - said it was unable to assess its financial position and asked for its shares to be suspended from trading.

U.K. bank executives want investors to buy into their vision of the future. But the past keeps catching up with them, The Wall Street Journal reported. During recent results presentations, CEOs of British banks boasted how they had cleaned up their balance sheets, refocused their franchises and cut underperforming business lines. However, most of the headlines were buried in the back of their regulatory filings.