KPMG comments on on today’s Q2 Credit Conditions survey from the Bank of England

Karim Haji, Global and UK Head of Financial Services at KPMG, comments on the Bank of England’s Q2 Credit Conditions Survey:

“These latest figures present a complex picture of the current lending landscape. With inflation having finally dropped to the Bank of England’s 2% target, we’ve seen demand for lending increase across the board. The falls in inflation, combined with positive wage growth in the past year, are starting to alleviate cost of living pressures on households and unlock more spending power.

“Yet interest rates remain high, and despite expected cuts are unlikely to return to the levels seen when the hiking cycle began. The cost of borrowing remains a major burden on those who have made use of lending facilities since the 2022 mini-budget or will be thinking of doing so in the coming months. As more and more households’ mortgages come up for renewal, it follows that with significant jumps in monthly repayments the number of defaults could rise. Given the improving economic outlook, any upward momentum in defaults should be short lived, although lenders should remain vigilant.”

ENDS

About KPMG UK: 

KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 18,000 partners and staff. The UK firm recorded a revenue of £2.96 billion in the year ended 30 September 2023.

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 273,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.