(MENAFN- ING)
The worst impact of rate hikes on bank lending is behind us. Financial conditions already eased somewhat in anticipation of possible future rate cuts, which has helped bank lending growth to turn slightly positive again in recent months. This is the case for both households and businesses. Still, the current pace of lending translates into a lacklustre investment outlook, making the case for cautious rate cuts from the ECB to allow the economy some breathing space for the quarters ahead.
Bank lending to non-financial corporates increased from 0.3% to 0.4% growth year-on-year, while household borrowing dipped from 0.3 to 0.2%. Overall, there was a slight acceleration in the pace of borrowing by the private sector.
Money growth (M3) picked up notably, from 0.4 to 0.9% year-on-year. The increase in money is mainly coming from net external assets growing, due to the rapidly increasing eurozone trade surplus as energy prices have abated. Money growth still stands well below the growth rates of above 5% year-on-year seen in the period before the ECB started to hike though.
The ECB also released data on consumer expectations of inflation today, indicating that expectations for the coming 12 months have fallen further. All in all, today's data will not be a game-changer for the ECB, allowing a first cut at the next meeting.
MENAFN26042024000222011065ID1108144185
Author:
Bert Colijn
*Content Disclaimer:
This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more here: https://think.ing.com/about/disclaimer/
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.