Banks tightening lending at rate last seen during financial crash amid fears Brits’ debts are reaching dangerous levels
The decision to tighten loans comes after lending rates edge closer to numbers seen during the financial crash
BANKS are tightening up their lending at a rate last seen during the financial crash amid fears Brits’ debts are reaching dangerous levels.
Nearly a fifth (18.8 per cent) of all lenders expect to reduce the money they loan between now and the end of June, the Bank of England said yesterday.
That compares to just 7.9 per cent in January — the last time the Bank published its credit report.
It means Brits could find it harder to get credit.
The BoE’s latest survey found lenders expect to impose stricter credit-scoring criteria on customers applying for cards.
MOST READ IN MONEY
But mortgage availability is forecast to increase over the period. Debt aid charities have raised fears some households are taking on credit at levels they will not be able to pay off.
The Bank has also spoken of its concern.
The 2008 financial crash was triggered in part by banks lending too much to customers who could not afford to repay their debts.
IHS Markit economist Howard Archer said: “If the fundamentals for consumers do weaken further as expected, it is vital banks adopt tight lending standards or risk causing serious debt problems for the economy.”
