Thursday, June 30, 2011
Bank of England says mortgage defaults are on the rise – and that’s before a rate rise.
U.K. lenders expect defaults on loans to homeowners and small businesses to rise in the third quarter of 2011, the Bank of England said Thursday.In its quarterly credit-conditions survey, the U.K. central bank said lenders reported that their losses from defaults on home loans rose in the second quarter and the rate of default is expected to increase in the third quarter. Losses on unsecured loans, like credit cards, are also expected to increase in the third quarter, lenders said. Britons are facing an unprecedented squeeze on their finances from a combination of stagnant wages, higher taxes and high inflation. The BOE said lenders had expected the cost of home loans to decrease in the second quarter compared with the first and the availability of loans to rise. In the end, that didn't