Bank credit growth in the eurozone accelerated in July, the first full month after the European Central Bank raised interest rates for the first time since 2023.
Loans to non-financial corporations rose at an annual rate of 4.4% in July, up from 4.0% in June, according to data released on Thursday. Credit to households also increased, climbing to 3.1% from 3.0% in the prior month.
The acceleration in lending comes as the ECB raised its key deposit rate by 25 basis points to 3.75% in June, marking its first hike since 2023. The central bank has since maintained a tightening bias amid persistent inflation pressures in the region.
Analysts noted that while credit growth remains positive, the pace remains below pre-pandemic levels, reflecting ongoing economic uncertainty and higher borrowing costs. The ECB's latest policy stance aims to balance inflation control with economic stability, though the lagged impact of past rate hikes continues to weigh on credit demand.
The data underscores the mixed signals in the eurozone economy, where inflation remains elevated despite tighter financial conditions. The ECB's next policy decision, due in September, will be closely watched for further guidance on the trajectory of borrowing costs.
