The Bank of England has just published its credit conditions survey covering the first quarter of this year. Here is the executive summary:
• Lenders reported that they had reduced the availability of secured credit to households in the three months to mid-March 2009. A small net balance of lenders was expecting an increase in overall credit availability over the next three months.
• Unsecured credit availability to households and small businesses was reported to have been reduced by less than expected.
• Corporate credit availability had increased slightly over the past three months, contrary to the small fall expected in the 2008 Q4 survey. A further increase in corporate credit availability was anticipated over the next three months.
• Demand for secured lending for house purchase and for remortgaging was reported to have declined over the past three months.
• Demand for credit by private non-financial corporations had fallen over the past three months. Reduced
Terms and conditions
• Overall, spreads on secured lending to households were reported to have widened over the past three months, significantly more than expected. Non-price terms on secured lending were generally reported to have tightened, with further tightening expected.
• Lenders reported a further widening in spreads on corporate lending. They expected spreads to increase further.
• Default rates, and losses on secured and unsecured lending to households and lending to private non-financial corporations were reported to have risen over the past three months.