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Banks To Tighten Lending Criteria On Loans And Reduce Credit Card Limits

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http://www.telegraph.co.uk/finance/personalfinance/6250653/Banks-to-tighten-lending-criteria-on-loans-and-reduce-credit-card-limits.html

Banks are expected to tighten their lending criteria on loans and credit cards amid signs of economic recovery, a report by the Bank of England suggests.

It comes as more lenders said they had reduced the availability of mortgages rather than increased it during the past three months following a “deterioration” in the cost and access to wholesale funds.

It comes despite billions of pounds of taxpayers’ money being pumped into some of Britain's biggest banks.

The Bank’s Credit Conditions Survey suggested lenders will place stricter limits on those they give money to and reduce credit card holders’ limits in the run up to Christmas.

It also warned that more people would default on their loans as the profit margins made by lenders on credit cards and unsecured loans had risen.

It comes despite signs of recovery in the economy with house prices and number of mortgages approved rising from the low levels seen during the height of the credit crunch.

Oliver Gilmartin, a senior economist at the Royal Institution of Chartered Surveyors, said: “The survey is yet to signal any significant improvements in the availability of credit to households.”

The banks said there had been a reduction in the availability of mortgages during the past quarter, but this is expected to improve over the next three months as the billions of pounds pumped into economy begins to filter through to consumers.

Howard Archer, an economist at Global Insight said: “While latest hard data still indicates muted lending to corporates and households, the Bank of England survey at least boosts hopes that Quantitative Easing and other policy measures undertaken by both the central bank and the government to boost bank lending are starting to feed through to have a beneficial impact.

The credit based economy appears in deep trouble, if banks don't want to lend and people don't want to borrow consumption is going to be depressed for a long time.

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I'm tying up my finances here and I haven't noticed any credit tightening.

Today I was offered a £7000 loan from the bank and £17,000 mortgage pot from Building society.

They are always on the lookout for a bigger fool.

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I'm tying up my finances here and I haven't noticed any credit tightening.

Today I was offered a £7000 loan from the bank and £17,000 mortgage pot from Building society.

Add that to the bill......£17,000 that should buy you something decent. :lol:

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They are always on the lookout for a bigger fool.

whats a mortgage pot from a building society?

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