United Kingdom lenders cutting back on unsecured loans, says Bank

Lloyd Doyle
October 13, 2017

In the Bank's survey, lenders also said the availability of unsecured credit to households had fallen during the the third quarter. The drop is bigger than between any two quarters since the end of 2008, at the height of the financial crisis.

The latest figures suggested that lenders were heeding warnings from the Bank about spiralling household debt.

The Bank of England's credit conditions survey showed nearly 30 per cent of lenders expect to reduce the amount of unsecured credit available to households, the most since the third quarter of 2008.

The length of interest-free periods for balance transfers on new credit card lending was reported by lenders to have decreased slightly over the past three months - the first fall since this question was first asked at the start of 2015.

The Bank earlier this year warned against a "spiral of complacency" by lenders. They fear that yesterday's figures show Britain's consumer economy is running out of steam just when uncertainty is growing over the impact of leaving the EU.

She said: "We're quite concerned about the consumer squeeze".

Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said it came as the worst phase of the squeeze on real wages was almost over with inflation around its peak.

Lenders said the availability of non-mortgage credit to households decreased in the third quarter of this year and was expected to see a "significant" decrease in the next three months.

Other reports by Iphone Fresh

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