Credit Conditions Review - 2017 Q1

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 April 2017

The Review covers data and intelligence gathered up to end‑March 2017. Unless stated otherwise, the data reported cover lending in both sterling and foreign currency, expressed in sterling.


Banks continued to have ready access to affordable funding in Q1. The cost of funding fell a little in 2017 Q1, on account of wholesale funding and retail deposit spreads over relevant reference rates being, on average, somewhat lower in Q1 than in the previous quarter. In recent discussions, most major UK lenders thought that the Bank of England’s Term Funding Scheme had contributed to this reduction in spreads. Respondents to the Bank of England’s Bank Liabilities Survey reported that transfer prices fell significantly in Q1.

Household credit conditions were little changed in 2017 Q1. There has been a slight fall in quoted rates on mortgage products, while lenders responding to the Bank of England’s Credit Conditions Survey (CCS) reported little change in the availability of secured credit. Annual growth in consumer credit remains high relative to recent years at 10.5% in February, similar to growth of 10.9% in November 2016. There has been little change on the quarter in price and non‑price terms of consumer credit and there continues to be strong competition between lenders in these markets. However, lenders responding to the CCS reported that the availability of unsecured credit decreased slightly in the first quarter of the year, mainly driven by tighter credit scoring criteria.

Lending to businesses continued to grow in early 2017, albeit at a somewhat more subdued rate, which probably reflects some weakness in corporates’ demand: the annual growth rate was 1.7% in February. UK businesses have continued to raise funds from capital markets: taken together with lending from UK MFIs, net finance raised was £0.9 billion a month, on average, across January and February. The availability and cost of bank credit has been broadly unchanged over the past three months.

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  ExcelBank funding data

  ExcelHousehold and corporate credit conditions data


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