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UK banks to further tighten unsecured lending to households

Staff Writer |
UK banks tightened conditions for unsecured lending to households and are expected to reduce its availability significantly at the end of the year, the latest Credit Conditions Survey from the Bank of England showed.

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Meanwhile, availability of secured credit to households increased slightly in three months to mid-September and lenders forecast its availability to be unchanged in the fourth quarter.

The availability of unsecured credit to households declined as banks tightened credit scoring criteria for granting both credit card and other unsecured loans. A significant decrease in availability is expected for the fourth quarter.

Further, default rates on credit card lending were reported to have increased slightly, while those on other unsecured lending increased significantly.

A further slight increase was expected for credit card lending only in fourth quarter.

According to the survey, the overall availability of credit to the corporate sector was reported to have been unchanged again in the third quarter.

Demand for secured lending for house purchases dropped slightly in the third quarter.

Lenders expected total demand for secured lending for house purchase to be unchanged in the fourth quarter.

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