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Major UK banks expect near-term slowdown in credit demand in post-Brexit vote Britain

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Major UK banks expect near-term slowdown in credit demand in post-Brexit vote Britain

The latest review of credit conditions from the found that majorBritish lenders expect the availability of credit to the corporate sector toremain steady after the U.K. voted in June to leave the EU, though a furthertightening in credit availability in the commercial real estate sector could beon the horizon.

The BoE's latest quarterly credit conditions survey ofBritish banks found that the cost and availability of credit to companies ofall sizes was unchanged in the three months ahead of the EU referendum.Lenders, however, reported a fall in availability of commercial real estatecredit for the first time since the second quarter of 2012.

In post-Brexit vote discussions with the BoE, the country'smajor lenders — Banco SantanderSA, which operates in the U.K. through , , , , andRoyal Bank of Scotland GroupPlc — expected a slowdown in demand for credit in the near termfrom large corporates and small and midsize enterprises, partly reflectinginvestment decisions being delayed and slowing M&A activity.

The survey also found that secured credit availability tohouseholds tightened slightly in the three months to mid-June, but noted thatquoted rates on a range of two-year fixed-rate mortgages remained broadly flatin recent months and close to historical lows.