LONDON (Reuters) – Increasingly cautious British lenders expect to scale back mortgage lending in the next three months by the greatest extent since the depths of the financial crisis in late 2008, a Bank of England survey showed on Thursday.

With less than six months to go until Britain leaves the EU, the BoE’s quarterly Credit Conditions Survey showed reduced appetite for risk was the biggest drag on banks’ and building societies’ plans to supply secured borrowing and loans for businesses.

Overall, the survey added to a subdued outlook for Britain’s housing market. Also on Thursday, the Royal Institution of Chartered Surveyors said their members were the most downbeat about house prices since the Brexit vote in 2016.

The BoE also said lenders expect demand for unsecured loans to consumers to fall by the most since late 2011 – which might help to soothe unease at the BoE about strong growth in consumer credit over the past couple of years.

“The BoE has been concerned that banks risk becoming complacent in their lending behavior so it should take some comfort from banks reportedly tightening their lending standards for granting unsecured consumer credit,” Howard Archer, chief economic adviser to the EY ITEM Club consultancy, said.

Lenders expect to restrict the availability of loans to businesses over the next three months by the most since early 2012, the BoE said.

Chiming with other signs of weak investment ahead of Brexit, lenders said they expect reduced capital investment to cut businesses’ demand for loans by the most since the second quarter of 2009 — the last time Britain was in recession.

The BoE survey was conducted between Aug. 20 and Sept. 7.

Read the original article here

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.

This site uses Akismet to reduce spam. Learn how your comment data is processed.