U.K. Credit Conditions Improve

U.K. banks and other institutions modestly increased lending to the corporate sector in the second quarter, the Bank of England's credit conditions survey showed Thursday.

The survey also showed that lenders expect to further ease credit availability for companies over the next three months, a closely-watched factor as policy makers try to gauge whether the U.K. economy might be starting to recover from a deep recession.

Loans to the commercial real-estate sector fell in the last three months, the BOE said.

The survey also showed that for the first time since September 2007, the net balance of lenders reporting an increase in secured lending to households was in positive territory in the three months to mid-June.

A larger positive net balance of firms expected secured lending to households to expand in the third quarter. However, the supply of unsecured loans to households fell in the three months to June.(…)

The survey also showed that loan spreads for households and companies had increased and that default rates for households and companies had increased in the three months to mid-June.(…)

Demand for lending from businesses was broadly unchanged in the second quarter, the survey showed, although it was expected to increase in coming months. Demand for secured loans to households was reported to have increased in the last three months and is expected to expand further in the third quarter.

Full WSJ article