Bank lending to euro zone companies and households accelerated in July, according to data released by the European Central Bank on Thursday.
Loans to non-financial corporations grew at an annual rate of 4.4% in July, up from 4.0% in June. Lending to households increased to 3.1% from 3.0% in the prior month. The pickup in borrowing occurred during the first full month after the ECB implemented its first interest rate hike in nearly three years.
The ECB raised rates in July to address inflationary pressures, marking a shift from its prolonged accommodative policy stance. The data suggests that despite tighter financing conditions, demand for credit remained resilient among businesses and consumers in the euro area.
The central bank’s latest lending figures provide insight into the transmission of monetary policy across the bloc’s economy. Analysts will monitor whether the trend persists as borrowing costs continue to rise in the coming months.
