Bank of England flags up credit lending standards

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The Bank of England’s Financial Policy Committee says underwriting standards for consumer credit are a possible problem and will be “monitored closely”.

The FPC’s latest quarterly assessment, published today, says household debt levels are high and rising relative to incomes.

The assessment says: “Consumer credit has been growing particularly rapidly.  This could principally represent a risk to lenders if accompanied by weaker underwriting standards. The FPC judges that these standards should be monitored closely.

“It supports a review launched by the PRA into the credit quality of new lending by PRA-regulated lenders and a review by the FCA into its rules and guidance on creditworthiness assessments used in the consumer credit market.

“The FPC will review these findings over the coming months.”