LONDON: British finance minister George Osborne said on Monday it was a "logical step" to cap the levels of interest that short-term payday loan providers can charge.
"We've taken steps to control things like the roll over of those loans and I think the next logical step is to cap the overall cost of credit," he told BBC radio.
"It's working in other countries, it helps hard-working people, and in fixing the banks we need to make sure we fix all parts of the banking and financial system and payday lending is part of it."
Britain's financial watchdog was criticised last month for not imposing a cap on interest rates imposed by payday lenders - which can exceed 5,000 percent a year - as part of proposals to discipline the industry, which provides short-term loans intended to tide borrowers over until payday.
Osborne said the regulator would decide how a cap would be set and implemented.
The move comes amid growing criticism of the interest rates charged by short-term lenders such as Wonga and Provident Financial.
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