Karim Haji, Global and UK Head of Financial Services at KPMG, comments on today’s Q1 Credit Conditions Survey from the Bank of England:
“Mortgage default rates, while unchanged, remain at a two-year high, and the uptick in unsecured lending demand points to the financial strain many households are under.
“Despite the welcome base rate cut and falling inflation in the first quarter, there are some difficult months ahead as global tensions continue to cast a shadow of uncertainty over the economy, and households face a raft of utility price rises.
“As a result, we may see defaults rise in the second quarter, against a backdrop of weak UK growth and the impact of ongoing global trade volatility on the nation’s finances.
“The rise in unsecured lending demand highlights how many households are having to rely on credit to get by. As people brace for rising bills in the second quarter, we may see borrowing increase further. Lenders will need to be ready to provide the right level of support to those who are in, or approaching, financial difficulty in the months ahead.”
