Eurozone lending takes another hit in May

EUROZONE bank lending slowed further in May, dragged down by higher interest rates and a recession in the bloc’s vast manufacturing sector, European Central Bank data showed on Wednesday (Jun28).

The ECB has been raising interest rates at the fastest pace on record over the past year to combat stubborn inflation, weakening demand for bank credit and slowing everything from the housing market to construction and consumer spending.

Lending growth to businesses in the 20-nation currency bloc dipped to 4.0 per cent in May from 4.6 per cent a month earlier, while household credit growth slowed to 2.1 per cent from 2.5 per cent.

Growth in the M3 measure of money circulating in the eurozone meanwhile fell to 1.4 per cent from 1.9 per cent, coming just below expectations for 1.5 per cent in a Reuters survey. REUTERS