AFP Frankfurt :
Lending to the private sector picked up in th,e eurozone in June as businesses borrowed more, data from the European Central Bank showed Wednesday.
Adjusted for some purely financial transactions, the pace of growth in lending to non-financial firms jumped from 3.7 to 4.1 percent year-on-year.
With growth in lending to households flat at 2.9 percent, that meant businesses accounted for all of a 0.2 percentage-point increase in the pace of overall lending to the private sector, which reached 3.5 percent.
Economists watch loan growth closely, as more cash flowing into the economy points to an increase in activity.
The data is especially vital for the ECB as it eyes the results of its
decision last month to dismantle a key pillar of its support to the eurozone
by the end of the year.
Aiming to boost growth and stoke inflation to the target of just below 2.0 percent, the Frankfurt institution has set interest rates at historic lows and buys 30 billion euros ($35 billion) of government and corporate bonds per month.
Both policies are designed to pump cash through the financial system and into the real economy, where it can power investments, hiring and consumer spending.
But from October, the ECB will reduce purchases to 15 billion euros per month before ending them in December, saying the move is justified as inflation is on a solid path towards its goal.
A quarterly survey published yesterday by the central bank showed that between April and June, demand for credit remained strong among firms and households and banks were loosening conditions for issuing and repayment of loans.
ECB policymakers have nevertheless left their options open to extend bond-buying again if needed if the economy shows signs of weakening.
Lending to the private sector picked up in th,e eurozone in June as businesses borrowed more, data from the European Central Bank showed Wednesday.
Adjusted for some purely financial transactions, the pace of growth in lending to non-financial firms jumped from 3.7 to 4.1 percent year-on-year.
With growth in lending to households flat at 2.9 percent, that meant businesses accounted for all of a 0.2 percentage-point increase in the pace of overall lending to the private sector, which reached 3.5 percent.
Economists watch loan growth closely, as more cash flowing into the economy points to an increase in activity.
The data is especially vital for the ECB as it eyes the results of its
decision last month to dismantle a key pillar of its support to the eurozone
by the end of the year.
Aiming to boost growth and stoke inflation to the target of just below 2.0 percent, the Frankfurt institution has set interest rates at historic lows and buys 30 billion euros ($35 billion) of government and corporate bonds per month.
Both policies are designed to pump cash through the financial system and into the real economy, where it can power investments, hiring and consumer spending.
But from October, the ECB will reduce purchases to 15 billion euros per month before ending them in December, saying the move is justified as inflation is on a solid path towards its goal.
A quarterly survey published yesterday by the central bank showed that between April and June, demand for credit remained strong among firms and households and banks were loosening conditions for issuing and repayment of loans.
ECB policymakers have nevertheless left their options open to extend bond-buying again if needed if the economy shows signs of weakening.
