By Tyler Durden
As if Theresa May did not face enough challenges, the latest survey from The Bank of England (BoE) suggests the British consumer is about to face the biggest credit crunch since the great financial crisis.
After repeated warnings from BoE about the surging pace of lending to households, British lenders are planning the biggest cutback in consumer loans in nearly 10 years (BoE’s quarterly net balance of lenders’ expectations for the availability of unsecured lending over the next three months fell to -28.6 from -16.2.)
Earlier this year the BoE warned lenders may be dicing with a “spiral of complacency”, with car loans a particular area of worry, and now, as The New York Times reports, this latest survey signals the steepest contraction since the fourth quarter of 2008, when the economy was in the depths of its worst post-war recession.
Thursday’s survey figures showed Britain’s consumer economy is running out of steam, said Joanna Davies, economist at Fathom Consulting, the only forecaster in recent Reuters polls to predict a recession.
“We’re quite concerned about the consumer squeeze,” Davies said, citing falling wages in inflation adjusted terms and historically low household savings.
“If you add tightening credit conditions onto …read more