Credit card defaults 'lower than expected' in Q4
22 January 2010 12:33:56
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| Fewer credit card holders defaulted in Q4 2009 than expected. |
In the latest Bank of England (BoE) 'Trends in Lending' report, defaults on unsecured credit as a whole were found to have fallen, despite lenders predicting an increase.
However, the study also showed that the amount lost through defaults rose during the quarter, although the total was again lower than had been originally predicted.
"In recent discussions with the Bank, some major UK lenders partly attributed falls in default rates to an earlier tightening of lending standards and lower-than-expected unemployment," read one section of the report.
"However, they expected these measures of distress to remain elevated in 2010, as unemployment was expected to continue rising - albeit at a slower rate."
The Bank also noted that demand for unsecured credit is likely to remain subdued this year as households attempt to reduce their existing debts.
Meanwhile, David Blanchflower, a former member of the BoE's panel, suggested yesterday that the central bank had failed to realise that a recession was imminent.
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