The government said on Monday it would allocate 1 billion pounds towards a new state-backed business bank designed to expand lending to smaller firms currently starved of loans from Britain's main lenders, Reuters reported. The government hopes its backing will be matched by a similar amount from private capital and could support up to 10 billion pounds of new and additional lending, Business Secretary Vince Cable said.

Debt-laden British retailer JJB Sports Plc said on Monday it was appointing administrators to sell its assets and brands after failing to receive an offer for the entire company, threatening thousands of jobs. A familiar sight on Britain's high streets with about 180 stores and 4,000 employees, JJB has been battling falling sales and stiff competition from larger rival and aggressive discounter Sports Direct International Plc. Sports Direct is seen as a potential bidder for some JJB stores.

George Osborne has a problem. The U.K. chancellor of the exchequer has staked the government's credibility on two fiscal rules designed to address the country's high deficit and burgeoning debt, The Wall Street Journal Heard on the Street blog reported. The first has proved slippery, since it requires the elimination of the structural budget deficit over a rolling five-year period—potentially delaying it indefinitely. But the second target is harder to fudge: that net debt as a share of GDP should be falling by 2015-16. Many economists believe he is likely to miss this.

Three international banks that backed out of $10 billion debt restructuring talks with an investment company controlled by Dubai's ruler said Thursday they are now pursuing legal action against the firm, dashing hopes of a consensual deal, The Seattle Times reported on an Associated Press story. The move by Britain's Royal Bank of Scotland, Commerzbank of Germany and South African lender Standard Bank will likely further complicate Dubai Group's efforts to move beyond its debt troubles after more than a year and a half of negotiations with creditors.

The U.K. unemployment rate rose in July, ending a streak of seven consecutive months of unchanged or declining jobless levels that confounded economists, and adding to an outlook of economic gloom for Britain's contracting economy, The Wall Street Journal reported. The Office for National Statistics said Wednesday that in the three months to the end of July, the number of people without jobs grew by 28,000 from the same period ending in June, pushing the unemployment rate to 8.1% from 8.0% the data showed.

Britain faces a fresh fight with Brussels over who has control over the City of London, as it confronts a key element of the plans for eurozone banking union that makes it easier for London to be overruled on contentious matters of supervision, the Financial Times reported. In a proposal that will cause alarm among eurosceptic MPs, the European Commission will on Wednesday unveil reforms that strengthen the European Banking Authority, which co-ordinates rulemaking between the EU’s national supervisors.

Burberry Group PLC issued a surprise profit warning on Tuesday and reported its worst same-store sales figures since the financial crisis, raising concerns about a slowdown in the luxury sector, where companies are feeling the pangs of a decelerating China and macroeconomic uncertainty world-wide, The Wall Street Journal reported. The British fashion house, known for its classic trench coats and Haymarket check, is scheduled to report full quarterly sales figures in October.

State-controlled Royal Bank of Scotland said on Monday it would use the government's new flagship lending scheme to offer cheap funds to manufacturing companies, in a first move to put the scheme into action, Reuters reported. Britain launched its 'funding for lending' (FLS) plan in June as part of efforts to lift the economy out of recession, making 80 billion pounds of cheap loans available to banks provided they go to households and businesses.

Bulgarian telecoms operator Vivacom obtained UK court approval to proceed with a 1.7 billion euro ($2.1 billion) debt restructuring, ending two years of wrangling with lenders and failed attempts to sell the company, Reuters reported. Under a deal approved by Mr Justice Vos in a hearing at the High Court in London, Russia's second-biggest bank VTB Capital and Bulgaria's Corporate Commercial Bank (CCB) are buying over 70 percent of Vivacom and existing lenders are writing off 1 billion euros of debts.

Despite complaints from insolvency practitioners that staff and budget cuts at the Insolvency Service are allowing unscrupulous directors to escape justice, the Department for Business, Innovation and Skills shelved an initiative to streamline the process for reporting misconduct, The Telegraph reported. The Government said a drive to reduce red tape for the smallest companies was behind the decision.