The central bank said that lending to the private sector increased 0.9 per cent on July 2009, building on a 0.5 per cent rise in June.
Analysts said that the real bright spot was that growth in lending for house purchase – a leading indicator of the Eurozone business cycle – gained further momentum in July, rising to 3.5 per cent from 3.3 per cent. However, bank lending to firms continued to contract with bank lending to non-financial firms down 1.3 per cent.
Eurozone broad money growth was weak in July, expanding at just 0.2 per cent on an annual basis, compared to a consensus of 0.3 per cent. This indicates that inflation pressures are likely to remain muted over the medium-term.
However, Klaus Baader at Societe Generale noted that shorter-term measures of M3 growth are above the annual rate, indicating strengthening momentum – over the past six months, M3 is up 1.9 per cent on an annualised basis.