LONDON—The Bank of England is poised to order banks to rein in lending to prevent the U.K. credit card market from overheating.
“Bank of England Governor Mark Carney is reluctant to hike interest rates because it would risk slowing the entire economy but officials are worried about a boom in household debt as Britons splurge on credit cards and car loans,” The Telegraph stated.
Consumer credit in the U.K. is rising at a rate of around 10% per year, a pace not seen since before the financial crisis, The Telegraph said.
The Bank of England has publicly acknowledged the acceleration in lending but banks have so far have not shown signs of improving lending standards, The Telegraph added.
“As a result, economists expect banks will be told to stop giving out ever-lower quality loans in an effort to chase higher volumes of business,” The Telegraph said.