UK card defaults rise for longest period in 17 years: BOE
Published Thu, Oct 8, 2026 · 07:57 PM
THE number of Britons defaulting on credit card debt has risen for six consecutive quarters for the first time since the financial crisis in a sign that households are coming under severe pressure as a result of the Middle East conflict.
The share of lenders saying credit card default rates rose in the three months to September outnumbered those that saw a decline by 26 percentage points, a Bank of England survey showed. Lenders expect another increase in the final quarter.
The sharp rise extended the period over which default rates have grown to 18 months. The last time there was an equivalent period of expanding credit card default was between 2008 and 2009.
The figures in the BOE’s quarterly credit conditions survey of banks and building societies suggest households are struggling to cope with the surge in borrowing costs since the Iran war began at the end of February.
Mortgage and credit card rates have risen sharply this year, squeezing family finances. Inflation, at 3.1 per cent now, is expected to top 4 per cent early next year and the latest credit conditions survey does not capture the full impact of the Iran war.
It was conducted between Aug 17 and Sep 4, before the recent escalation that has driven oil prices back above US$100 a barrel.
Households appear to be taking on more debt just to get by. An earlier BOE survey showed that consumer credit increased by £2.5 billion in August, the highest figure on record as people borrowed more on their credit cards and tapped into more car dealership finance and personal loans.
Defaults on mortgage debt fell slightly in the third quarter and were expected to be unchanged in the final three months of the year, the BOE survey found. Homeowners in financial difficulty tend to miss mortgage payments as a very last resort. BLOOMBERG
