Eurozone bank lending stagnated again in February

BANK lending to eurozone companies and households continued to stagnate last month, with high interest rates likely to have discouraged borrowers as well as lenders, European Central Bank data showed on Thursday (Mar 28).

The ECB has jacked up borrowing costs to record highs to tame inflation, but this has taken a heavy toll on the economy, which has been in the doldrums for a year.

Adjusted loans to households grew by only 0.3 per cent in February, unchanged from the previous month. Growth in credit to companies accelerated slightly to 0.4 per cent from 0.2 per cent in January.

On the upside, the quantity of money circulating in the eurozone economy was no longer shrinking, instead growing at a still meagre 0.4 per cent in February after a 0.1 per cent increase in January.

With inflation now under control, the ECB is expected to start cutting interest rates in June. REUTERS