Credit Conditions Review - 2016 Q4

This publication presents our assessment of the latest developments in bank funding and household and corporate credit conditions. It draws on sources including the results of the Bank Liabilities Survey and Credit Conditions Survey, other statistics we have collected and surveys from other organisations.
Published on 13 January 2017

The Review covers data and intelligence gathered up to end-December 2016. Unless stated otherwise, the data reported cover lending in both sterling and foreign currency, expressed in sterling and are seasonally adjusted.


There was mixed news on bank funding conditions in 2016 Q4. Sterling swap rates rose in Q4, although they remained below the levels observed at the start of 2016. Set against this, the spreads over relevant reference rates on retail deposits and wholesale funding have been, on average, lower in Q4 than Q3. In recent discussions, most major UK lenders thought the Bank of England’s Term Funding Scheme had contributed towards the fall in wholesale funding spreads. On balance, lenders reported a fall in their transfer prices in Q4 in the Bank of England’s Bank Liabilities Survey. Retail deposit growth slowed, but remained strong relative to recent years. Respondents to the Bank Liabilities Survey reported an increase in their other funding volumes.

Secured credit availability was little changed in the three months to mid-December, according to lenders responding to the Bank of England’s Credit Conditions Survey. Quoted rates on many fixed-rate mortgages fell on average in 2016 Q4. Demand for secured lending increased slightly in Q4, according to respondents to the Credit Conditions Survey, having fallen significantly in Q3. Consistent with this, gross secured lending was little changed in the three months to November. The annual growth rate in the stock of consumer credit increased to 10.8% in November.

The cost of both outstanding and new bank credit to businesses fell over the three months to November 2016, following the previous fall in reference rates. The availability of credit across business sizes was little changed in Q4 and remained above normal levels according to the Bank’s network of Agents, though some major UK lenders noted a marginal tightening in supply to a small number of specific sectors. On balance, survey evidence suggested that corporate credit demand continued to soften in Q4. Nevertheless, growth in bank lending to UK businesses continued at rates similar to those in 2016 H1.

  PDFDownload PDF

  ExcelBank funding data

  ExcelHousehold credit conditions data

  ExcelCorporate credit conditions data

  ExcelAdditional boxes

  ExcelAdditional rates table

Other related publications