Eurozone Bank Lending Remains Unshaken By Global Uncertainty For Now

2025-09-25 02:12:00

What today's bank lending data indicates is that the transmission of monetary policy seems to be working pretty well despite all the global uncertainty. Worries about faltering investment - driven by businesses seeking more clarity on the economic outlook - seem to be overstated looking at today's numbers. Borrowing continues at a decent enough pace to expect economic growth to continue to be supported, albeit at a moderate pace.

Bank lending growth continues on its upward trend, according to the most recent figures. Adjusted loans to households increased by 2.5% year-on-year in August, up from 2.4% in July. Loans to non-financial corporates increased by 3% year-on-year, up from 2.8% in July.

Money growth in the eurozone was previously supported by strong increases in net external assets, but in recent months this has slowed. This is in part because of a lower trade surplus. While the narrow definition of money (M1) shows stable growth at 5% year-on-year, the broader definition (M3) is showing slowing annual growth.

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