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BofE survey shows less credit available and higher defaults.
3 October, 2008
The Bank of England Credit Conditions Survey which was published yesterday and looks at the three months past and future, reported that lenders had reduced the availability of secured credit to households by more than they had anticipated when last surveyed.
This trend is expected to continue and is blamed on expectations for house prices and concerns about the economic outlook. Corporate credit suffered a similar fate with a bigger decline than had been anticipated in the last survey.
Unsecured credit which was expected to decline in the last survey, did so, and is expected to continue the downward trend.
The survey also reported a sharp decline in demand for secured lending for house purchase and remortgaging, with lenders expecting demand to fall furter in the next quarter.
Default rates on both secured and unsecured household loans were reported to have risen in the last quarter by more than expected, and and upward trend is anticipated for the next quarter.