The Department for Business, Innovation and Skills (BIS) and the Treasury are commissioning research into how a cap on the total cost of credit in the high-cost credit market could affect consumers.

The research follows on from last year's consumer credit and personal insolvency review, where submissions asked the government to consider a limit which could be charged on short-term, high-cost credit products.

According to a statement released by the two departments, there was little hard evidence on what impact the proposal would have, so additional research is required before the government makes a thorough assessment of what the impact might be on the industry and on consumers who rely on this market to obtain credit.

Consumer minister Edward Davey said: "This government is committed to improving how people access and use credit. But if we’re to have a comprehensive understanding of this, we need research into how a cap could affect

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