Credit Conditions Survey

What is Credit Conditions Survey?

The Credit Conditions Survey, or CCS, is a quarterly poll by the Bank of England, the UK central bank. It began in 2007 Q2 as a regular qualitative survey, added questions in 2007 Q4, and published first results on 26 September 2007. It asks UK-resident banks and building societies about lending to UK households and firms in sterling and foreign currency. About 30 lenders take part each quarter, around 10 to 15 per questionnaire, and the Bank keeps members and weights secret.

It tracks lender views on change, not actual loan volumes, rates or growth, and results do not necessarily reflect the Bank's views. It does not survey borrowers. It supports the Bank mission of monetary and financial stability.

When is it released and what happens each release?

Fieldwork runs each quarter in March, June, September and December, starting on the penultimate Monday of the prior month with about a month to reply. Past questions compare the past 3 months with the prior 3 months, while future questions compare the next 3 months with the past 3 months. Reports appear quarterly after the reference period at 9.30am with the next release date, plus annex balances, Excel history, questionnaires and a background article. Late replies miss that round, and published balances stand as final with no revision policy stated.

What moves Credit Conditions Survey?

The survey moves with 4 questionnaires plus factor questions on what drives supply and demand.

• Secured lending to households: availability, mortgage demand, remortgaging, approvals, scoring criteria and spreads over Bank Rate. It also covers loan-to-value splits at 75 per cent, defaults and loss given default.
• Credit card lending: demand, approvals, card limits, spreads, minimum payments, interest-free periods, defaults and loss given default.
• Other unsecured lending: personal loans, overdrafts and hire purchase with the same demand, terms and default questions.
• Corporate lending: demand and supply for small, medium, large, property and financial firms, plus spreads over SONIA, covenants, defaults and risk tools.

The 2008 Q3 crisis round, surveyed 26 August to 17 September 2008, shows why parts matter more than headlines. Secured availability fell to minus 39.3 while house-purchase demand hit minus 69.1, defaults rose to 44.8 and loss given default to 54.6. Overall secured spreads read 0.0, or unchanged, yet prime eased to 4.0 while buy-to-let tightened to minus 2.9. Low loan-to-value availability rose to 12.7 while high loan-to-value availability fell to minus 59.5, on weak outlook, risk appetite and house-price views.

How is Credit Conditions Survey calculated?

1. Answer: each lender picks one option per question, such as up a lot, up a little, unchanged, down a little or down a lot.
2. Score: a lot counts double a little, using 1, 0.5, 0, minus 0.5 and minus 1. Signs are set so positive always means higher demand, more availability, cheaper terms or higher defaults.
3. Weight: each score is weighted by that lender's market share, using loan flows for households and loan stocks for firms.
4. Balance: net percentage balance equals 100 times the share-weighted sum, on a scale from minus 100 to plus 100. For example (illustrative), shares of 40%, 30%, 20% and 10% scoring minus 1, minus 0.5, 0 and 0.5 give minus 50.
5. Seasonality: lenders set aside normal seasonal effects themselves, and the Bank applies no statistical seasonal adjustment.
6. Reading: above 10 means change, 5 to 10 means slight and below 5 means flat, with no 50 threshold. Reports from 2019 Q2 and earlier also called above 20 significant, a label since dropped.

Key point: A balance such as minus 39.3 is not a share of lenders or a fall in loans but a share-weighted intensity score. It tracks change from the prior 3 months, holding demand steady for supply questions, and shows lender views, not the Bank view.