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.”