Financial conditions remained strong in the UK in Q2 2025 as the supply of credit increased while demand was more mixed.

• Availability of secured and unsecured household credit increased in Q2 and is expected to rise further in Q3.

• Corporate credit availability also increased slightly, especially for small and medium-sized firms.

• Household demand for home purchase loans rose in Q2 but is expected to fall in Q3. However, remortgaging demand is expected to rise.
• Unsecured credit demand (credit cards and personal loans) increased, but some softening is expected next quarter.

• Business loan demand rose modestly in Q2 and is expected to be flat to slightly stronger in Q3.
• Mortgage spreads widened slightly, consistent with upward pressure on rates.
• Corporate loan spreads widened for mid-sized firms and are expected to widen for large firms in Q3.

• Default rates were broadly unchanged across all borrower categories. Although, there was a slight uptick in losses given default on secured household loans and large corporate loans.

Lenders reported that the availability of secured credit to households slightly increased in Q1 2025 and was expected to increase over the next three months to Q2 2025.

• Lenders reported that the availability of unsecured credit to households increased in Q1 and was expected to increase in Q2.

• Lenders reported that the overall availability of credit to the corporate sector slightly increased in Q1. Credit availability for small and medium-sized businesses increased in Q1, while credit availability for large businesses was unchanged. Overall credit availability to the corporate sector was expected to be unchanged in Q2.

• Lenders reported that demand for secured lending for house purchase increased in Q1, but was expected to be unchanged in Q2.

• Lenders reported that demand for corporate lending from small businesses slightly increased while demand from medium-sized and large businesses increased in Q1.
• Demand for corporate lending in Q2 was expected to be unchanged for small and medium-sized businesses, but was expected to increase slightly for large businesses.