The Scotsman cartoon: Financial mean streets

Payday loans costs will be capped under plans announced by Chancellor George Osborne.

Illustration: Iain Green

New financial regulator the Financial Conduct Authority will set the level of the cap, which will cover fees charged on the loans as well as interest.

Meanwhile, a review has found RBS staff are turning away too many small business loans at an early stage partly because they face increasing sanctions for putting through applications that “turn bad”.

The report by former Bank of England deputy governor Sir Andrew Large found that up to 10 per cent of small and medium enterprises (SMEs) rejected at a pre-application stage may in fact be suitable for financing.

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• Treasury will cap interest on payday loans