On Thursday the Bank of England released its latest Credit Conditions Survey. The Bank of England is currently a busy bee, with lots to deal with. Aside from the day to day challenges it is monitoring and trying to balance, it also conducts regular surveys on financial issues, with the poll put before banks and building societies.

The survey results for Q3 have now been released, with the survey being completed between 30 August and 16 September 2022. It is therefore a snapshot in time and before the current financial turmoil the economy has entered.

It shows however, that ever before the recent economic challenges, that:

  • More businesses and individuals are defaulting on loans (so failing to pay on time).
  • There was little change in the availability of credit to businesses but it was expected that the availability of credit would reduce over the forthcoming months. Demand for secure lending reduced slightly.
  • Lenders were becoming less keen to lend secured credit to households and that they expected the availability of credit to continue to reduce. Demand for secure lending decreased.

So what does this all mean? It shows a trend that lenders are becoming more cautious when it comes to lending, as they see the risk being greater. They expect more individuals and businesses to be less able to repay debt and the risk of default increasing. In short, people and businesses are going to struggle to pay their bills.

When it comes to getting paid, you want to be at the front of the queue so improve your credit control and take action on your debt recovery.

If you want to read the Credit Conditions Survey in more detail you can do so here.