BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - Lending to Eurozone households and non-financial corporates grew at a faster pace in August as declining interest rates supported demand, data from the European Central Bank showed Thursday.
Annual growth in adjusted loans to households rose to 2.5 percent from 2.4 percent in July. This was the strongest growth since March 2023.
At the same time, growth in loans to non-financial corporations hit the highest since June 2023. Loan growth increased to 3.0 percent from 2.8 percent in July.
Overall adjusted loans to the private sector grew at a steady pace of 2.8 percent in August.
The ECB had reduced its interest rate by 150 basis points since last September.
ING economist Bert Colijn said bank lending data indicates that the transmission of monetary policy seems to be working pretty well despite all the global uncertainty.
The economist said worries about faltering investment seem to be overstated looking at today's numbers. Borrowing continues at a decent enough pace to expect economic growth to continue to be supported, albeit at a moderate pace, added Colijn.
Further, ECB data today showed that the broad monetary aggregate M3 expanded 2.9 percent on a yearly basis in August after rising 3.3 percent in July. The M1, the narrow measure, logged an expansion of 5.0 percent, which was unchanged from July.
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