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Lenders will make it harder to borrow
Published: 02/01/2009 |
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Lenders intend to make it harder to borrow cash, the Bank of England has said. Its review of credit conditions found major lenders had tightened their lending criteria and would make it still harder to borrow money. The government has insisted banks make more money available and pass on the rate cuts decided by the Bank's Monetary Policy Committee. "Lenders reported that they had reduced the availability of secured credit to households in the three months to mid-December 2008," it found. The availability of unsecured credit has also weakened and further reductions are expected. Defaults on both secured and unsecured loans have also increased over the last quarter, something the study expected to continue. The Bank's findings could add to calls for interest rates to be cut further and if lenders withhold reductions the government could be forced to intervene, the Telegraph has speculated. Howard Archer, UK economist at Global Insight told the paper: "We expect the Bank's Monetary Policy Committee to reduce interest rates by at least a further 75 basis points from 2pc to 1.25pc next Thursday."  |
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