Forex Flash: BoE inflation report reveals surge in lending – RBS

By
A A A
Share |

FXstreet.com (Barcelona) - A point of interest in data for lending to individuals in the UK is that July marks the final month before the BoE/HMT 'Funding for Lending Scheme' ( FLS ) became operational. According to the RBS European Economist Team, "We do not expect any significant pick-up in mortgage lending in the remainder of this year - rather, recent trends are expected to persist."

"Mortgage rates are grinding higher and the underlying fundamentals suggest that households, in aggregate, have little desire (and/or ability) to borrow more. The stock of household debt relative to disposable income towers at 146%. This is down from a peak of 168% in Q1 2008, but remains substantially above the average 115% level over the two decades decade prior to the financial crisis." the Team adds.

The BoE's August Inflation Report seemed to hint that the Bank does not expect any near-term surge in lending as a result of the FLS, instead the Scheme will ameliorate an expected fall in lending: 'Prior to the announcement of the Scheme, Bank staff's assessment was that UK bank lending was more likely to decline than increase over the coming 18 months'.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Forex and Currencies

Referenced Stocks: FLS

FXstreet.com

FXstreet.com

More from FXstreet.com:

Related Videos

Stocks

Referenced

50%

Most Active by Volume

72,157,294
  • $61.36 ▼ 2.65%
56,535,455
  • $34.92 ▼ 3.78%
49,608,479
  • $4.42 ▼ 3.07%
49,328,445
  • $25.91 ▼ 3.18%
48,932,529
  • $16.37 ▲ 0.49%
38,182,422
  • $3.17 ▼ 1.55%
33,297,581
  • $73.86 ▲ 1.37%
32,790,375
  • $47.43 ▼ 1.02%
As of 4/23/2014, 04:07 PM