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UK banks likely to reduce unsecured lending in Q3

Staff Writer |
British banks are set to reduce their unsecured lending in the third quarter, the latest Credit Conditions Survey from the Bank of England showed Thursday.

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Lenders said the availability of secured and unsecured credit to households will decrease over the next three months to mid-September.

An expected slight decrease in availability of secured credit to households reflects a changing appetite for risk, the bank said.

In the second quarter, the availability of secured credit to households increased, while that for unsecured credit decreased from the prior period.

The Bank of England had toughened its stance on credit card, personal loan and car finance provided by lenders.

The Prudential Regulation Authority last week said that the resilience of consumer credit portfolios is reducing, due to the combination of continued growth, lower pricing, falling average risk-weights and some increased lending into higher-risk segments.

While demand for credit card lending increased slightly in the second quarter, it was expected to be unchanged in the third quarter, survey showed today.

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