Credit Conditions Review - 2017 Q3

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 12 October 2017

The Review covers data and intelligence gathered up to end-September 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 funding in 2017 Q2 and Q3, with the cost of most funding instruments at, or near, post-crisis lows. Indicative measures of wholesale funding spreads over relevant reference rates have continued to fall over the past two quarters, while there has been little movement in retail deposit spreads. Respondents to the Bank of England’s Bank Liabilities Survey reported that transfer prices had continued to fall during this period.

The mortgage market has remained broadly stable in recent months. Competition between lenders remains strong and mortgage rates have fallen slightly further over the past six months. Annual growth in consumer credit fell slightly to 9.8% in August 2017. Although competition and growth in this market remain strong, there are tentative signs of a slight tightening in lending criteria, with lenders expecting further tightening in Q4.

Credit supply conditions continue to be broadly favourable for corporate borrowers, but there are some tentative signs that credit conditions may have tightened at the margin — in particular to smaller companies and in certain industries. Net finance raised by businesses — from capital markets and banks — has been relatively strong over the past six months, driven by larger businesses and a small number of mergers and acquisitions. More generally, however, demand for credit appears to have remained somewhat subdued across firms of all sizes.

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