Britain has sued the European Parliament and European Union member states over a controversial plan to cap bankers' bonuses, in a last-ditch effort to block the legislation before it enters into force next year, The Wall Street Journal reported. The legal challenge was filed with the EU's top court, the Luxembourg-based European Court of Justice, "in the past couple of months," the court's press division said Wednesday. It follows a series of victories for the U.K. over financial services legislation as the country seeks to claw back powers from Brussels. In its lawsuit, the U.K.

Bank lending to U.K. businesses fell again in August, an indication that a long-standing drag on growth has yet to be eliminated, The Wall Street Journal reported. Lending to businesses has been weak in the years following the 2008 financial crisis, a hindrance to business investment that economists believe has contributed to a significant decline in the productivity of the country's workers.

As the quaterly rent day approaches - when retailers pay three months’ rent in advance – research from insolvency trade group R3 has found 31% of retailers currently have a “higher than normal risk” of entering insolvency, economia reported. By comparison, 25% of all UK businesses have the same risk of failure. Liz Bingham, president of R3, said, "High Street retailers have had a tougher time of it than other sectors in the past few years.

The Treasury will rule on whether to split Royal Bank of Scotland into a "good" and "bad" bank shortly after the Conservative Party conference, according to a report. A review commissioned by the Government is expected to reject carving the part-nationalised bank in two, the Independent on Sunday reported. Meanwhile, RBS is also close to deciding who to sell a package 315 branches to - with a consortium led by private equity fund Corsair said to be in pole position.

Years of recession and financial crisis have turned almost one in ten of the UK’s 2.5 million companies into “zombies”, threatening a “surge of insolvencies” as they are left behind by the improving economy, The Scotsman reported. In new report published today, financial health monitoring group Company Watch says the number of so-called zombie businesses has soared by 108 per cent in the last five years, to 227,000.

Co-Operative Bank Plc said it’s willing to engage with creditors proposing an alternative recapitalization plan as it seeks to raise 1.5 billion pounds ($2.3 billion), Bloomberg reported. The U.K. lender, which is being pushed by regulators to bolster capital after incurring losses following its 2009 acquisition of Britannia Building Society, was responding to proposals from Moelis & Company UK LLP, which is advising a group that owns 43 percent of Co-Op’s lower Tier 2 bonds. Bondholders said they want all of the bank’s subordinated bonds and preferred stock converted to common shares.

Pressure is building on the Government to address fears that a debt-fuelled housing bubble is emerging after a leading UK property website tripled its growth forecast for home prices this year, The Telegraph reported. Rightmove started the year forecasting that average national asking prices would rise by 2pc over 2013. The property website, which advertises more than 800,000 properties nationwide, now believes prices are set to increase by 6pc, having previously raised its outlook to 4pc in July.

Eight out of 10 British companies think pulling out of the European Union would be bad for business, according to a poll published on Thursday, Reuters reported. Talk of Britain breaking its 40-year ties with the EU gathered pace in January when Prime Minister David Cameron said he would negotiate a new role in Europe and hold a referendum by 2017 asking voters whether they wanted to stay in or leave. Of 415 firms surveyed by the research company YouGov, 78 percent thought staying in the EU would be in their best interest.

Britain’s unemployment rate was probably unchanged in July as the building economic recovery takes time to filter through to payrolls, Bloomberg reported. The rate based on an International Labour Organization method was 7.8 percent in the three months through July, according to the median of 28 economists in a Bloomberg News survey. Jobless claims probably dropped in August, according to a separate poll.

The Bank of England made no new attempt to talk down borrowing costs in financial markets on Thursday, prompting investors to pile on bets that it will raise interest rates sooner than it has suggested as growth picks up, Reuters reported. The Bank left monetary policy unchanged at its third monthly meeting under new governor Mark Carney and opted not to repeat its warning of July that investors were getting ahead of themselves by pushing up bond yields.