ECB: Lending to companies in the euro area continued to

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Lending to companies in the euro zone continued to grow in July, beating analysts’ estimates, who had expected a slowdown, due to recession fears and lenders’ plans to tighten access to new loans, data from a study published by the European Central Bank showed on Friday. (ECB), reports Reuters.

Loans granted in July to companies rose by 7.7%, compared to an advance of 6.9% in June, while loans to households increased by only 4.5% in July, compared to an advance of 4.6 % in June.

Already in the second quarter, eurozone banks tightened access to new loans and warned that they would be even more cautious in the current quarter, as higher fuel prices and the war in Ukraine reduced household confidence and savings.

These developments have increased fears that the ECB’s interest rate hike could exacerbate the decline in economic activity.

M3 money supply growth, considered as an indicator of economic activity, slowed to 5.5% in July from 5.7% in June, close to analysts polled by Reuters who had expected a 5.6% rise. The data partially reflect the ECB’s decision to end on July 1 asset purchases under the APP (asset purchase program), introduced in 2014, to stimulate the euro zone and avoid a potential deflation. This program helped to keep borrowing costs low in heavily indebted eurozone countries.