The latest Bank of England credit conditions survey shows that lenders expect to see loan defaults rise in the coming months. Amid the ongoing cost of living crisis, banks predict that mortgages, unsecured lending and business loans will see an increase in defaults over the three months to May. Banking firms and credit providers also said they saw a decrease in defaults for both secured and unsecured loans in the quarter to February. Lenders saw demand for unsecured lending increase in the three months to February, with this forecast to rise further in the current quarter. The report also shows that lenders plan to rein in mortgage lending, with the availability of secured credit set to decrease over the next three months to May. Demand for unsecured lending is expected to climb, having increased in the three months to February, with this driven by increased demand for credit cards and loans. Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said climbing inflation and “eye-watering” price rises for many essentials has forced more people to “borrow to make ends meet,” noting that credit card borrowing grew faster than any other month on record in February.
Evening Standard
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