Even though interest rates are going up and a recession is coming, banks kept lending to companies in the eurozone, which kept the sector’s biggest borrowing spree in over a decade going. This was shown by data from the European Central Bank on Monday.
New data showed that lending to businesses in the 19 countries that make up the euro area grew by 8.9% in October. This was the same as in September when it reached its highest rate since the beginning of 2009. The growth of household credit, on the other hand, slowed from 4.4% to 4.2%.
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But the flow of loans to companies dropped sharply, from 36.6 billion euros per month to 24.0 billion euros per month. This is because the flow of short-term loans stopped.
The growth of money in circulation in the eurozone, as measured by M3, slowed to 5.1% from 6.3%. This was much less than what a Reuters poll had predicted, which was 6.2%.
