According to the survey of the Bank of England, consumer debt including credit cards, car loans and second mortgages has risen. Lenders are worried about the huge consumer borrowing rate and are planning to tighten the credit rules and get tougher especially on credit card users.
According to the survey made to the main high street lenders, the lenders seem to cut access to credits in the first months of 2017 and they plan to limit it further. Since 2008 financial crisis, the lenders had not reduced lending. This decision is interpreted as the fear of increase of economic crisis.
Last month the British financial regulators had reported about the huge amount growth in borrowings. It is obvious that Britons have loaded debt on cards, car leasing schemes and personal loans. And, households having less access to cash to spend, has been other concern of the financial regulators seeing the economic crisis to continue.
The survey of the Bank of England also determined that corporate loans have also been affected. Before Brexit negotiations firms were more nervous about investing.
There is a dilemma on the fact that households are not able to find cash and they are not able to save money, and in order to have are turning to borrowing when they need fund big purchases. Rising inflation takes a bigger chunk out of incomes.