Euro zone lending slows further as rate hikes bite
Reuters
Published Jul 26, 2023 09:14
FRANKFURT (Reuters) - Lending to euro zone companies slowed again last month, adding to already mounting evidence that sharply higher interest rates are putting a brake on credit creation and economic growth.
Lending to firms in the 20-nation currency bloc expanded by 3.0% year-on-year after a 4.0% reading a month earlier while household credit growth slowed to 1.7% from 2.1%
The European Central Bank has raised interest rates by 4 percentage points in the past year and another hike on Thursday is essentially a done deal as inflation remains far too hike and could take until 2025 to fall back to the 2% target.
But recent economic data from PMI figures and sentiment indicators to a key lending survey have surprised on the downside, suggesting that the bloc continues to skirt recession, which should naturally cool price pressures.
The weak data is intensifying debate over just how much more the ECB needs to do and some economists argue that Thursday's rate hike will be the last, while some are betting one last move in September.
Growth in the M3 measure of money supply, seen in the past as a good indicator of future economic expansion, slowed to 0.6% from 1.0%, trailing expectations for a 1.0% rise.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.