Loans to euro zone households and firms fell in October for the second month in a row on an annual basis as broader money growth tempered, the EuropeanCentral Bank said today.
Loans to the private sector fell by 0.8 per cent compared to a year earlier, following a decline of 0.3 per cent in September.
The second year-on-year fall in private sector loans since data began to be collected in 1991 comes despite the ECB lending banks billions of euros of extra funds and urging them to pass it on to customers.
Loans also fell on a monthly basis, largely due to a contraction in lending to companies, where loans were 1.2 per cent lower than a year earlier.
Growth in M3 broad money supply, a measure of cash available to spend in the economy, eased to 0.3 per cent in October from 1.8 per cent in September, in line with expectations of subdued inflation pressure ahead.
The ECB has set a reference rate of 4.5 per cent for the three-month moving average of annual money supply growth, above which the bank sees dangers to medium-term price stability.
Reuters