FRANKFURT. — Lending growth to eurozone companies and households accelerated last month while a broader measure of money circulating rose, data from the European Central Bank (ECB) showed yesterday, indicating that the slow but steady recovery in lending was continuing. Hoping to revive borrowing and spending, the ECB has been easing policy for years, cutting rates deep into negative territory, offering ultra cheap loans and buying assets worth €80bn a month.The cheap cash has been slowly making its way into the real economy, increasing borrowing and investment.

But it has yet to revive consumer price growth, the ECB’s ultimate goal, with inflation hovering either side of zero for more than a year, well short of the bank’s target of close to but below 2 percent.

Lending to companies increased 1,7 percent year on year in June, up from a revised 1,6 percent reading a month earlier.

The readings for household lending were the same, up 1,7 percent, against the previous month’s 1,6 percent.

The ECB said its time series for corporate lending had been revised because of a change in the calculation of net lending and deposits within the various subsidiaries of a single group.

The annual growth rate of the M3 measure of money circulating in the eurozone — often an indicator of future economic activity — picked up to 5 percent from 4,9 percent a month ago, in line with expectations for a 5 percent reading.

Growth in M3, which includes items such as deposits with longer maturities, holdings in money market funds and some debt securities, peaked at 5,4 percent in April 2015 and has flatlined or slightly eased since then.

The ECB cut interest rates and expanded its asset-purchase programme in March to spur lending and inflation but has kept a steady course since, despite low inflation readings. – Reuters.

You Might Also Like

Comments

Take our Survey

We value your opinion! Take a moment to complete our survey