1. Part A: Risk outlook

2. Chart A.35 The credit gap remains very negative
Private non-financial sector credit to GDP gap(a)
Sources: British Bankers’ Association, Revell, J and Roe, A (1971), ‘National balance sheets and national accounting — a progress report’, Economic Trends, No. 211, ONS and Bank calculations.
Credit is defined as debt claims on the UK private non-financial sector. This includes all liabilities of the household and not-for-profit sector except for the unfunded pension liabilities and financial derivatives of the not-for-profit sector, and private non-financial corporations’ (PNFCs) loans and debt securities excluding derivatives, direct investment loans and loans secured on dwellings. The credit to GDP gap is calculated as the percentage point difference between the credit to GDP ratio and its long-term trend, where the trend is based on a one-sided Hodrick-Prescott filter with a smoothing parameter of 400,000. See Countercyclical Capital Buffer Guide at for further explanation of how this series is calculated.

3. Chart A.36 Credit growth continues to normalise
UK nominal GDP and UK real economy credit growth
Sources: Bank of England, ONS and Bank calculations.
Twelve-month growth rate of nominal credit. Credit is defined here as debt claims on the UK private non-financial sector. This includes all liabilities of the household and not-for-profit sector and private non-financial corporations’ (PNFCs) loans and debt securities excluding derivatives, direct investment loans and loans secured on dwellings.
Sterling M4 lending by UK MFIs to the household sector and PNFCs. Data cover loans and MFIs’ holdings of securities. Seasonally adjusted.

4. Chart A.37 Credit availability continues to increase
Household and corporate credit availability(a)
Sources: Bank of England Credit Conditions Surveys and Bank calculations.
Net percentage balances are calculated by weighting together the responses of those lenders who answered the question as to how the availability of credit provided to the sector overall changed in the past three months.

5. Chart A.38 Sterling-denominated corporate bond spreads have risen
Sterling-denominated corporate bond spreads(a)
Source: BofA Merrill Lynch Global Research.
Option-adjusted spreads. Sterling-denominated corporate bonds issued in domestic or eurobond markets.

6. Chart A.39 Household and public sector debt remain elevated
Public and private sector indebtedness
Sources: ONS and Bank calculations.
Gross debt as a percentage of a four-quarter moving sum of disposable income. Includes all liabilities of the household sector except for the unfunded pension liabilities and financial derivatives of the non-profit sector. The household disposable income series is adjusted for financial intermediation services indirectly measured (FISIM).
Gross debt as a percentage of a four-quarter moving sum of gross operating surplus. Gross debt is measured as loans and debt securities excluding derivatives, direct investment loans and loans secured on dwellings. The corporate gross operating surplus series is adjusted for FISIM.
Public sector net debt excludes public sector banks. Not seasonally adjusted.

7. Chart A.40 Unsecured debt repayments increase debt service cost for mortgagors
Distribution of debt-servicing ratios (DSRs) for households with mortgages(a)
Sources: NMG Consulting survey and Bank calculations.
(a) The mortgage DSR is calculated as total mortgage payments (including principal repayments) as a percentage of pre-tax income. The total DSR is calculated as total
mortgage and unsecured debt payments (including principal repayments) as a percentage of pre-tax income. Reported repayments may not account for endowment mortgage premia. The chart shows the number of mortgagors within a particular DSR band as percentage of all households (including non-mortgagor households).