KPMG comments on today’s Q3 Credit Conditions survey from the Bank of England
A fall in default rates for unsecured lending is an encouraging sign and reflects the cautious approach to credit being taken by Brits says KPMG
A fall in default rates for unsecured lending is an encouraging sign
Karim Haji, Global and UK Head of Financial Services at KPMG, comments on today’s Q3 Credit Conditions survey from the Bank of England:
“These latest figures suggest that many households are still struggling in the current environment. Unsecured lending demand, while stable, remained elevated compared to the first quarter of the year. A fall in default rates for unsecured lending is an encouraging sign and reflects the cautious approach to credit being taken by households.
“Inflation could rise to 3% in early 2025, driven by higher energy prices and some forecasts predict headline inflation may return to target by the end of next year. This will take time to feed through to household finances. Coupled with the Bank’s cautious stance on interest rates, household spending power may not be unlocked any time soon. Even then, we are seeing a shift in consumer behaviour over the medium to longer term which is focused on saving not spending.
“Improvements in default rates can be short-lived so lenders mustn’t take their eye off the ball and ensure that they’re prepared to step back in to support under-pressure consumers.”
ENDS
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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.
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