Britain faces a timebomb as the cost of living crisis forces more people into crippling debt they will not be able to repay, according to a major study published today. The Centre for Social Justice (CSJ) think tank, founded by Iain Duncan Smith in 2004, warned that two of the flagship policies he is implementing as Work and Pensions Secretary - the “bedroom tax” and universal credit - could plunge more people into debt. It revealed that more than 5,000 people are already being made homeless each year because they cannot pay their mortgage or rent, The Independent reported.

The research churned out by the Bank of England’s financial-stability wing usually focuses on where strange new risks might lurk in the financial system, or how to safely dismantle stricken banks, The Wall Street Journal Brussels Beat blog reported. A new paper, published Tuesday, instead takes aim at how authorities deal with stricken countries, and suggests that repayment terms of government bonds should be linked to a country’s economic performance.

U.K. households reported that their finances deteriorated at the fastest pace for seven months in November, as weak pay growth and rising inflation expectations combined to limit cash availability, a survey showed Monday, highlighting the underlying fragility of the recovering economy, The Wall Street Journal reported. Data firm Markit's monthly household finances index fell to a balance of 38.8 in November from October's 41.0--the lowest since April--reflecting concerns over low pay rises and the recent increases in energy prices announced by several suppliers.

The National Asset Management Agency has put a London-based property company controlled by former Howard Holdings executives into receivership, according to court records in London, the Irish Times reported. The company, Wandle Holdings – which has 30 outstanding Anglo Irish Bank mortgages – is registered to an address at Hambalt Road, Lambeth in London, according to Companies House files. The administrative receiver to the company, Belfast-based John Hansen, was appointed on October 17th, though he will have to spend the next month or so investigating the company’s affairs.

British footwear retailer Barratts Shoes and film and computer game rental chain Blockbuster both went into administration on Monday, a form of bankruptcy protection, blaming tough trading conditions and threatening over 3,000 jobs. Many British retailers are still finding the going tough despite signs of economic recovery as inflation continues to outpace wage rises and competition from the Internet intensifies.

Distressed debt investor Centerbridge has bought hundreds of millions of euros of Apcoa Parking's leveraged loans in a bid to gain control of Europe's biggest parking management firm, banking sources said on Tuesday, Reuters reported. Lazard and Rothschild are advising Apcoa on a debt restructuring which has to take place before the company's 650 million euros ($875.85 million) of buyout loans mature in April 2014.

The Co-op has unveiled a radical restructuring of its banking arm – both in terms of its ownership structure and strategy – to raise fresh capital to fill a £1.5bn hole on its balance sheet, the Financial Times reported in a Q&A. How will the restructuring work? The Co-op Group will hand over 70 per cent of the equity in the bank to its most senior bondholders – known as the lower tier two group – in exchange for about £940m of their debt and an additional £125m cash injection.

A German court started insolvency proceedings for the co-owner of London's landmark Gherkin tower, German property group IVG Immobilien, which will continue to reorganise under its own administration, Reuters reported. IVG plans to submit a plan for its reorganisation to the court prior to Christmas and schedule a vote for its creditor committee in January, the company said on Friday. Should both agree to the plan, which would likely involve a debt-for-equity swap, it could exit the insolvency proceedings in the first half of next year as planned.

Against expectations, the number of company liquidations in England and Wales has fallen by 2.6% over the past three months, the latest statistics from the Insolvency Service reveal, Economia reported. There were 3,875 compulsory liquidations and creditor’s voluntary liquidations during Q3 2013, which is also down by 2% when compared to the same quarter in 2012. Individual insolvencies were also down by 7.3% on the same period last year but up slightly when compared to Q2. The numbers rose from 25,717 to 26,030 in Q3.

Royal Bank of Scotland is expected to confirm on Friday that it is to create a “bad bank” with more than £30bn of assets following a review of its operations ordered by the Treasury, The Telegraph reported. The taxpayer-backed lender is set to say that a new internal, but separately managed, bad bank is being established to deal with the legacy of its toxic assets - the least disruptive of three break-up options being looked at for the bailed-out bank.