Eurozone bank lending to businesses slowed in July, according to data out on Thursday from the European Central Bank, following its recent increase in borrowing costs.
Source: Sharecast
Adjusted loans to non-financial corporations in the private sector across the single-currency region totalled just €22bn during July, down from a €27bn in June and €34bn in May, the ECB's latest monetary data showed.
The slowdown came after the ECB raised its deposit rate by 25 basis points to 2.25% in June, from 2.0% previously, in response to inflationary pressures generated by the Middle East conflict and higher energy prices.
The central bank subsequently left rates unchanged at its July meeting, warning that the full inflationary impact of the energy shock had yet to emerge, though policymakers are expected to hike the key rate to 2.5% at their next meeting on 10 September.
Despite the weaker monthly flow, the annual growth rate of adjusted lending to non-financial corporations accelerated to 4.4% in July from 4.0% in June.
Elsewhere, adjusted lending to households was steady at €17bn in July, unchanged from the amount recorded in June, while its annual growth rate edged up to 3.1% from 3.0%.
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