Bank of England gloomy on future lending

03/10/2008

The recent worsening of the credit crunch is likely to see a further tightening-up of consumer loans, the Bank of England has said.

Recently, stock markets have fallen sharply and lending between banks has slowed - due to concern over the stability of the financial sector.

British institutions such as Halifax and Bradford & Bingley have been taken over, either by the government or a rival lender.

Now, a new report from the Bank suggests that mortgage and personal loans rates will be on the up due to this turmoil.

"Lenders reported [to us] that the changing economic outlook, their expectations for the housing market, and changes in their appetite for risk had contributed to the decline in credit availability," the report says.

Responding, George Buckley at Deutsche Bank said that he agreed with the new analysis.

Speaking to the BBC, he commented: "This is precisely what we would have expected, it reinforces the fact the housing market still has a lot further to weaken yet."

Tags; Debt Management and Banking, Credit Card Lifestyle,

Regional Debt Advice; Debt Advice Bingley, Debt Advice Bradford, Debt Advice Buckley,

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