Eurozone lending growth edges
up in Sept

Frankfurt am Main

Businesses and households in the eurozone borrowed more in September, figures from the European Central Bank showed, suggesting that the institution’s easy money policy is filtering through to the real economy. Credit to the private sector grew by 2.7 percent year-on-year last month, adjusting for some purely financial transactions, up from 2.6 percent in August. Lending growth is seen as an important indicator of the effectiveness of the ECB’s unconventional stimulus measures—designed to boost growth and inflation with cheap credit. Looking in detail at the figures, lending to households accelerated by 2.7 percent last month, the same pace as in August. Borrowing by non-financial companies meanwhile picked up from 2.4 percent in August to 2.5 percent in September. The latest lending data come ahead of a closely watched press conference by ECB president Mario Draghi later on Thursday, where he is expected to shed light on the fate of the bank’s ultra-loose monetary policies. With cheap loans to banks, record low interest rates and monthly bond purchases of 60 billion euros ($71 billion), policymakers have sought to pump cash through the financial system. As growth in the 19-nation eurozone has picked up since the introduction of the extraordinary measures, the ECB is now expected to announce a major reduction in its bond purchases from next year. But with inflation in the single currency area still stubbornly low, analysts predict the Frankfurt-based institution will leave open the end-date for the scheme. —AFP

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