Daily Times

Euro zone companies continued to tap bank credit in July, although lending growth slowed since the height of the coronavirus crisis, data from the European Central Bank showed on Thursday.

With much of the euro zone economy going into lockdown over the spring, companies rushed to make use of emergency credit, and public measures from state guarantees to super-cheap central bank funding allowed banks to keep providing cash.

Lending growth to non-financial corporations in the 19-country euro zone expanded by 7.0% in July compared with a year earlier, down from the 7.1% recorded in June but still not far from an 11-year-high as the bloc emerged from the worst recession in living memory.

Household lending growth, meanwhile, held steady at 3% for the fourth straight month, suggesting little disruption as various job-guarantee schemes kept a lid on unemployment and limited income losses for households.

The annual growth rate of the M3 measure of money supply accelerated to 10.2% in July from 9.2% in June, beating expectations for 9.2%.

Although M3 growth has tended in the past to foreshadow changes in business activity, much of its recent surge reflects ECB money printing, which hit record highs this year.