The euro sign is photographed in front of the former headquarters of the European Central Bank in Frankfurt, Germany, April 9, 2019. The image is presented in slow motion as the camera moves. REUTERS/Kai Pfaffenbach/File photo
FRANKFURT, July 27, 2010 – Lending to euro zone companies accelerated in June as inflation and uncertainty over the end of the war in Ukraine are causing banks to tighten lending, confounding fears of a recession, European Central Bank data showed.
Loans to companies in the 19-nation euro area rose 6.8% in June after 5.8% a month earlier, while credit growth to households continued at 4.6%, fresh data showed on Wednesday.
Banks tightened lending in the second quarter and last week’s ECB quarterly credit survey indicated more caution in the current quarter as high oil prices and the war in Ukraine erode savings and erode confidence. Read more
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This raised concerns that the ECB’s rate hike – which began with a 50 basis point increase last week and could continue into next year – could deepen the recession.
As of the adjusted date, the monthly flow of new loans to businesses reached 54 billion euros, more than double the May figure.
M3 growth in the euro zone meanwhile fell from 5.8% to 5.7%, partly a reflection of the ECB’s reduction in money printing. That was still higher than the 4.6% expected.
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In the report of Balazs Koranyi by Francesco Canepa
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