UK banks are more hesitant about lending to households than at any point since the financial crisis more than a decade ago, the Bank of England said in figures that underscore the growing risks for the economy.
The central bank said its quarterly credit conditions survey showed lenders expect to sharply rein in the amount of money they extend for credit cards, car finance and personal loans. It was the most pessimistic banks have been on future credit availability since the survey began in 2007.
Surging interest rates and falling real incomes are delivering the biggest squeeze on consumer living standards in decades, reducing the ability of many households to repay their debts.
The BoE’s gauge tracks the expectations banks have about the availability of unsecured credit to households. That index fell to a reading of minus 50.2 in final three months of 2022, the lowest reading on record and down from minus 17.2 in the third quarter.
Banks are also planning to reduce credit card limits and blamed a gloomy economic outlook for plans to clampdown on unsecured lending to households.
If banks follow through with the sentiment captured in the survey, it would return conditions in the credit market to levels prevailing at the start of the pandemic and also when the global financial crisis rattled markets and triggered a recession.
Credit availability was lower only during the early stages of the coronavirus pandemic, but expectations have never been so negative as the BoE said. The survey measures whether banks expect to rein in lending or not and doesn’t give a gauge for how much they plan to cut credit.
“We’re already struggling with debts like credit cards and loans, and the number of defaults rose in the last three months of the year,” said Sarah Coles, senior personal finance analyst at Hargreaves Lansdown.
“There’s a good chance this will get even worse. Rising rates play their part, but the sheer scale of people’s debts also poses enormous challenges.”
The BoE said lenders reported declining demand from households for mortgages and unsecured borrowing at the end of 2022 as they are squeezed by the highest inflation for four decades.
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What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
The specs
Price, base: Dh228,000 / Dh232,000 (est)
Engine: 5.7-litre Hemi V8
Transmission: Eight-speed automatic
Power: 395hp @ 5,600rpm
Torque: 552Nm
Fuel economy, combined: 12.5L / 100km
The specs: 2019 Audi A7 Sportback
Price, base: Dh315,000
Engine: 3.0-litre V6
Transmission: Seven-speed automatic
Power: 335hp @ 5,000rpm
Torque: 500Nm @ 1,370rpm
Fuel economy 5.9L / 100km
The specs
Engine: 5.0-litre supercharged V8
Transmission: Eight-speed auto
Power: 575bhp
Torque: 700Nm
Price: Dh554,000
On sale: now
The%20specs
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TOURNAMENT INFO
Fixtures
Sunday January 5 - Oman v UAE
Monday January 6 - UAE v Namibia
Wednesday January 8 - Oman v Namibia
Thursday January 9 - Oman v UAE
Saturday January 11 - UAE v Namibia
Sunday January 12 – Oman v Namibia
UAE squad
Ahmed Raza (captain), Rohan Mustafa, Mohammed Usman, CP Rizwan, Waheed Ahmed, Zawar Farid, Darius D’Silva, Karthik Meiyappan, Jonathan Figy, Vriitya Aravind, Zahoor Khan, Junaid Siddique, Basil Hameed, Chirag Suri
UAE central contracts
Full time contracts
Rohan Mustafa, Ahmed Raza, Mohammed Usman, Chirag Suri, Mohammed Boota, Sultan Ahmed, Zahoor Khan, Junaid Siddique, Waheed Ahmed, Zawar Farid
Part time contracts
Aryan Lakra, Ansh Tandon, Karthik Meiyappan, Rahul Bhatia, Alishan Sharafu, CP Rizwaan, Basil Hameed, Matiullah, Fahad Nawaz, Sanchit Sharma
Meydan race card
6.30pm: Baniyas (PA) Group 2 Dh125,000 (Dirt) 1,400m
7.05pm: Maiden (TB) Dh165,000 (D) 1,200m
7.40pm: Maiden (TB) Dh165,000 (D) 1,400m
8.15pm: Handicap (TB) Dh170,000 (D) 1,900m
8.50pm: Rated Conditions (TB) Dh240,000 (D) 1,600m
9.25pm: Handicap (TB) Dh175,000 (D)1,200m
10pm: Handicap (TB) Dh165,000 (D) 1,400m
