Financial News: Eurozone Bank Lending To Households Rise Most In

Eurozone Bank Lending To Households Rise Most In 10 Months

09/26/2024 - 06:27:00 (RTTNews)

(RTTNews) - Bank lending to households in the euro area logged its fastest growth in ten months in August, however, the pace of growth was weak, data published by the European Central Bank revealed Thursday.

Lending to households moved up 0.6 percent from a year ago, following a 0.5 percent rise in July. Lending marked the biggest increase since October 2023.

Likewise, adjusted loans to businesses climbed at a faster pace of 0.8 percent after July's 0.6 percent increase. This was the strongest since July 2023.

The annual growth rate of adjusted loans to the private sector increased to 1.6 percent from 1.3 percent in July.

Further, annual growth in M3, the broad monetary aggregates, improved to 2.9 percent in August from 2.3 percent a month ago. At the same time, M1, the narrow measure continued to fall, down 2.1 percent, following July's 3.1 percent decrease.

ING economist Bert Colijn said the pickup in bank lending was too small to be considered encouraging. He noted that the largest impact of the rate hikes is behind us and now the underperforming economy has become the major concern.

With interest rates still restrictive and inflation close to target, the discussion within the ECB about the pace of rate cuts will heat up in the months ahead, Colijn said.

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