November 29, 2023


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UK lenders expect record rise in access to unsecured loans

British five pound banknotes are seen in this picture illustration taken November 14, 2017. REUTERS/Benoit Tessier/Illustration/File photo

LONDON, July 15 (Reuters) – British lenders are expecting a record increase in the availability of unsecured credit to households over the next three months as the country’s economy bounces back from its lockdown slump, a Bank of England survey showed on Thursday.

Lenders also expect to increase the availability of new mortgages – although demand was forecast to fall – while the supply of lending to businesses was seen unchanged.

The figures come from a quarterly survey of British banks and building societies conducted from June 1 to June 18 and add to signs of a rapid recovery from the coronavirus pandemic.

British consumer borrowing slumped during the lockdowns as people had fewer spending opportunities and millions of workers who might otherwise have been unemployed received furlough support payments.

Previously released BoE data for May showed the first net increase in consumer borrowing since August, although separate figures for June released on Thursday by the Office for National Statistics showed the first monthly fall since January in credit and debit card spending. read more

The expected rise in the availability of unsecured credit to households over the next three months was the biggest since the survey began in 2007.

Demand was seen increasing for credit card borrowing and other types of unsecured debt with longer interest-free periods on credit cards to entice borrowers.

Default rates on unsecured borrowing fell over the past three months but are expected to rise again.

Reporting by David Milliken; Editing by Kate Holton and William Schomberg

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