Money lenders in the UK are tightening their conditions and are making loans less-readily available, according to the latest figures from the Bank of England.
The bank’s credit conditions survey established that both secured and unsecured lending activity has been gradually constrained over the past three months.
Lenders are looking to avoid financial risk in the wake of the credit crunch but for many consumers the more difficult economic environment means they will struggle to find approval for a debt consolidation loan.
Additionally, the results of the bank’s survey have suggested that financial services firms will become steadily more reluctant to lend to credit consumers over the coming quarter.
“Credit scoring criteria were reported to have tightened for both credit card and non-credit card unsecured lending and approval rates had fallen,” a statement from the bank regarding the past three months read.
Next week, the Bank of England’s monetary policy committee will meet to decide whether a cut in the base rate of interest will provide a necessary boost to the British economy.