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Eurozone lending growth falls back in June: ECB
[FRANKFURT] Lending to businesses and households by eurozone banks rose in June, but at a slower rate, monthly figures from the European Central Bank showed Thursday.
Loans to the private sector grew 2.5 per cent last month, adjusting for some strictly financial operations, the central bank said in a statement.
That was a slight fall from the pace of 2.7 per cent in May, which the ECB revised up from the 2.6 per cent reported last month.
Borrowing by households held steady in June, growing at 2.6 per cent - the same level as the previous month.
But growth in lending to non-financial businesses slowed, sliding to 2.1 per cent last month from the 2.5 per cent recorded in May.
The ECB watches lending to households and non-financial firms in the 19-nation eurozone as an indicator of the effectiveness of its policies, designed to boost growth and inflation with easy credit.
Governors have offered cheap loans to banks, set interest rates at record lows and bought tens of billions of euros of bonds each month in a bid to pump cash through the financial system and into the real economy.
Making credit more accessible should mean households and businesses spend, invest and hire more, the bank calculates, driving economic growth and pushing inflation towards its target of just below two per cent.
The ECB increased its growth forecasts for the coming years in June, but sees no corresponding rise in inflation materialising soon.
At its most recent monetary policy meeting this month, ECB president Mario Draghi held off making any change to the easy-money policy, telling observers to expect an update later this year on whether he will put an end to mass bond-buying.