Loosening credit conditions completes “hat-trick” of economic good news

Based on the Bank of England’s latest Credit Conditions Survey, lenders also reported conditions would improve in both markets in the second quarter of this year. Additionally, the overall availability of credit to the corporate sector saw a slight uptick – with this expected to remain unchanged going into the second quarter of this year.

And this increase in availability was matched by a jump in demand across the secured, unsecured and corporate lending spaces.

This, according to Broadstone’s senior director of risk Paul Matthews, completes what has been a "hat-trick" of economic good news after the positive GDP and inflation figures.

He explained: "Despite uncertainty returning to the market in spades over the past few weeks, the Credit Conditions Survey suggests an expansion in both the availability and demand for household borrowing.

"It marks a hat-trick of economic good news for the government in the past seven days after inflation fell more than expected this week and the economy expanded faster than anticipated last week.

"As rates fall, the loosening of credit conditions could boost economic activity by encouraging investment and consumption, but it must be noted that the economy remains in a precarious situation.

"Household confidence will be key to taking advantage of this increasing supply of credit but remains shaky and could be derailed should the ongoing global negotiations on trade tariffs result in further market turbulence.

"However, with default rates beginning to fall, it suggests that there could be some light on the edge of the horizon. Lenders should ensure they continue to offer options that suit the long-term financial interests of all their customers and stand ready to protect borrowers should matters take a turn for the worse."