Eurozone lending slump sparks further slowdown fears
European Central Bank figures show a drop in loans to eurozone companies
Bank lending to eurozone businesses has fallen to its slowest rate since January 2019, according to figures from the European Central Bank (ECB).
Business loan growth slowed to 3.7 per cent in September from 4.3 per cent a month earlier, sparking fears that the eurozone’s economic slowdown was beginning to undermine corporate lending.
The slump comes despite the ECB approving a new stimulus scheme in September, aimed at avoiding a prolonged downturn. The stimulus was partly aimed at banks, in the hope they would continue to lend to businesses despite challenging economic circumstances.
Meanwhile, the annual growth rate of the M3 measure of money supply slowed to 5.5 per cent in September, slightly underperforming expectations. The M3 is usually seen as an indicator of future economic performance.
The data follows gloomy reports on the state of the eurozone, and particularly of Germany, its largest economy. The IHS Markit purchasing managers’ index revealed a eurozone economy that “remained close to stagnation” in the third quarter of 2019.