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Euro zone corporate business slows further By Reuters

by Mike Robinson

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© Reuters. FILE PHOTO : Frankfurt headquarters of European Central Bank (ECB), Germany. March 12, 2016. REUTERS/Kai Pfaffenbach/File Photo

FRANKFURT (Reuters) – Lending to euro zone companies slowed further last month, European Central Bank data showed on Monday, extending its steady downward trend and likely raising concern among policymakers about banks’ reluctance to extend credit.

The August lending rate to firms fell from 1.7% to 1.5% in July to 11.2.6 billion euros in August. However, adjusted loan flows increased from 10.2 million euros to 12.6 billion euros in the month before.

Firm lending is now at half the pre-pandemic level. Due to strong cashflows and some hesitation from banks to lend, firms are seeing a significant increase in their lending.

The annual growth rate of household lending remained steady at 4.2% for 13 years, which is a new high.

The annual rate of growth of M3, the measure of money supply, rose to 7.9% from 7.6%. Market expectations were for 7.8%.

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