BOE survey sees lenders anticipating sharp decline in consumer credit availability
BOE Q3 credit conditions surveys now published 12 Oct
- UK lenders expect biggest decline in consumer credit availability in next 3 months since Q4 2008
- Defaults on non-credit card unsecured lending up sharply
Tightening credit conditions have been in process for a while now with the BOE helping to cool the housing market and expressing justifiable concerns over household debt levels
Says the BOE:
- The availability of secured credit to households was reported to have increased slightly in the three months to mid-September 2017 This was focused on borrowers with low loan to value ratios (75% or less) and was driven by lenders' market share objectives.Lenders expected availability to be unchanged over the next three months to mid-December.
- Lenders reported that the availability of unsecured credit to households decreased in Q3 and expected a significant decrease in Q4
- Credit scoring criteria for granting both credit card and other unsecured loans were reported to have tightened again in Q3, while the proportion of unsecured credit applications being approved fell significantly. •
- The overall availability of credit to the corporate sector was reported to have been unchanged again in Q3
- Lenders reported that overall demand for secured lending for house purchase fell slightly in Q3. This was driven by a slight fall in demand for prime lending. Lenders expected total demand for secured lending for house purchase to be unchanged in Q4.
- Demand for both credit card and other unsecured lending products was reported to be unchanged in Q3, and was expected to be unchanged again in Q4. • Lenders reported a fall in demand for corporate lending for businesses of all sizes - and small businesses in particular
Demand from all businesses was expected to be unchanged in Q4.
Full survey, conducted between 21 Aug-8 Sept, here
GBPUSD currently 1.3242 , a tad lower again as EURGBP finds demand around 0.8950 that I highlighted in the order board post.