More British lenders plan to rein in the supply of credit to consumers in the next three months than at any time since the 2008/09 financial crisis, according to a Bank of England survey that may add to concerns about the economic outlook ahead of Brexit.
A net balance of 18.8 percent of British lenders expect to tighten the availability of unsecured credit to consumers in the next three months, the BoE’s quarterly credit conditions survey showed.
The last time the BoE conducted the quarterly survey, 7.9 percent of banks said they planned a similar tightening.
The new result marked the biggest proportion of lenders planning to tighten consumer lending since the end of 2008 – when Britain was mired in recession. The economic outlook was reported as by far the biggest drag on plans for credit supply.
Consumer credit expanded strongly last year, helping to sustain spending by households that fuelled strong economic growth after last June’s vote to leave the European Union.
But Thursday’s figures will add to worries about the outlook for consumers, who have become increasingly pressured by rising prices after the pound’s fall following the Brexit vote and a rise in global oil prices.
The BoE survey also showed weaker business investment exerted a “significant drag” on demand for credit from businesses.