The Bank of England survey on credit conditions and bank liabilities 11 January 2018
- Lenders report availability of secured credit to households was unchanged 3-months to mid-Dec 2017 No change expected over the next three months to mid-March 2018
- Availability of unsecured credit to households decreased again in Q4 2017 Lenders expect a significant decrease in Q1 2018
Demand
- Household demand for secured lending for remortgaging increased significantly in Q4 2017
- Q4 2017 saw largest q/q change in demand for this type of lending since the falls reported in early 2009
- Demand for secured lending for house buys increased slightly in Q4 2017
- Demand for credit card lending was reported to be broadly unchanged in Q4
- Demand for other unsecured lending was reported to have fallen significantly; most since Q4 2015
Loan Pricing
- Overall spreads on secured lending to households — relative to Bank Rate or the appropriate swap rate — were reported to have narrowed significantly in Q4 2017
- Overall spreads on secured lending to households were expected to be unchanged in Q1 2018
- Overall unsecured lending spreads tightened in Q4, and expected to be unchanged in Q1 2018
- Spreads remain stable on lending to businesses for medium-sized firms in Q4, but widened on loans to small businesses
- Spreads were expected to widen on lending to small and medium sized businesses in Q1 2018
Defaults
- Default rates and losses given default on secured loans to households fell significantly in Q4, expected to fall further in Q1 2018
- Default rates on loans to corporates increased slightly for small businesses, remained unchanged for medium and large PNFCs
- Survey was conducted between 20 November and 8 December 2017.
The broad gist is mortgage and re-mortgage borrowing was steady, consumers weren’t over stretching themselves on credit card and unsecured borrowing. Business borrowing was stable but there was a widening on SME spreads. Bad loans were down but small firm defaults were up. It’s a steady report and it’s not flagging any major problems.
Latest posts by Ryan Littlestone (see all)
- The last NFP competition of 2022 - December 1, 2022
- Will this month’s US NFP be a horror show? - October 4, 2022
- US NFP competition – Do you think there’s going to be a turn in the US jobs market? - August 31, 2022