The BoE publishes its credit conditions survey

The Bank of England has just published its credit conditions survey covering the first quarter of this year. Here is the executive summary:

Supply

• 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

• 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.

Defaults

• 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.