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.