Bank of England Credit Conditions Survey now published 14 Oct
- secured household credit unchanged
- overall credit demand from corp sector decreased significantly
Levels of UK household debt have always been part of my bearish GBP view and an even stronger part of my argument as to why the BOE could not afford to hike interest rates.
The reduced levels of demand from the corp sector is telling too and hardly shows an economy rushing to invest.
Says the BOE report:
Supply
- The availability of secured credit to households was reported unchanged in the three months to mid-September 2016, and was expected to remain unchanged in Q4 .Credit scoring criteria tightened slightly in Q3, for a second consecutive quarter, and lenders reported that the proportion of household loan applications being approved declined in Q3.
- Lenders reported that the availability of unsecured credit to households increased in Q3 The availability of other unsecured lending products, such as personal loans, appeared to increase again in Q3: credit scoring criteria continued to loosen, while the proportion of loan applications approved increased slightly.
- The overall availability of credit to the corporate sector was reported to have been unchanged in Q3 for the tenth consecutive quarter. Availability of credit to the commercial real estate sector was also unchanged in Q3, after falling in the previous quarter for the first time since 2012 Q2.
Demand
- Lenders reported that demand for secured lending for house purchase fell significantly in 2016 Q3. Within this, both demand for prime and buy-to-let lending decreased significantly, and the latter recorded the largest fall since the Credit Conditions Survey began in 2007 Q2.
- Lenders expected overall demand, and demand for prime and buy-to-let, to increase in Q4.
- Demand for other unsecured lending products was reported to have increased slightly in the three months to mid-September, after four consecutive quarters of significant increases.
- Demand for credit card lending was also reported to have increased in Q3. • Lenders reported that overall demand for corporate lending from small, medium and large businesses decreased significantly in the three months to mid-September
- Demand for lending from small and medium-sized businesses was expected to be unchanged and continue to decrease, respectively, in Q4. Demand from large business was expected rise slightly in Q4.
Full BOE 13-page report here
