London Daily

Focus on the big picture.
Wednesday, Jul 02, 2025

Rise in loan defaults but 'no signs' of wider credit crunch

Rise in loan defaults but 'no signs' of wider credit crunch

The survey findings come despite fears that recent turmoil in the global banking sector could lead to a squeeze on credit beyond the housing market, which has been showing signs of a slowdown.
Household loan defaults are on the up and mortgage supply is set to weaken - but there appears to be little sign of a wider tightening in credit, according to a survey of lenders.

Default rates for both secured and unsecured loans saw a rise in the three months to the end of February, the Bank of England's Credit Conditions Survey reported.

Banks and building societies also forecast such defaults would "increase further" in the three months to May.

Meanwhile, the availability of secured credit was unchanged over same period, although lenders cautioned they expect it to become weaker by the time of the next survey.

However supply of consumer credit is expected to increase slightly in the next quarter, while availability of credit to the corporate sector is expected to remain unchanged.

The survey findings come despite fears that recent turmoil in the global banking sector could lead to a squeeze on credit beyond the housing market, which has been showing signs of a slowdown.

Liz Martins, an economist at HSBC, said: "Despite all the monetary tightening and the turmoil of March, there is not too much evidence of banks pulling back."

However she added that the survey ran from the end of February to 17 March, so some responses would have predated Silicon Valley Bank's collapse and the takeover of Credit Suisse.

Groups such as the Financial Conduct Authority have recently expressed concern that thousands of mortgage borrowers could face payment difficulties due to pressures on household finances.

The survey, which is carried out quarterly, does not necessarily reflect the Bank's own views on credit conditions.
Newsletter

Related Articles

0:00
0:00
Close
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
King Charles Plans Significant Role for Prince Harry in Coronation
Two Chinese Nationals Arrested for Espionage Activities Against U.S. Navy
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
Trump Administration Considers Withdrawal of Funding for Hospitals Providing Gender Treatment to Minors
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
Russian Shadow Payments via Cryptocurrency Reach $9 Billion
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
×