BOE survey sees lenders anticipating sharp decline in consumer credit availability

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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

Says the BOE:

Supply:

  • 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

Demand:

  • 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

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

GBPUSD currently 1.3242 , a tad lower again as EURGBP finds demand around 0.8950 that I highlighted in the order board post.



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