Lending across the euro zone slowed to a near stand-still in August, data from the European Central Bank showed on Wednesday, as economic growth continued to falter and the bloc was skirting a recession, according to Reuters.
Bank lending to businesses expanded by just 0.6% in August the lowest figure since late 2015, from 2.2% a month earlier. Lending to households rose just 1.0% after 1.3% in July, the ECB said.
The monthly flow of loans to businesses was a negative 22 billion euros, the weakest figure in over two years, when the bloc was suffering through the pandemic.
The ECB has raised rates to a record high earlier this month to curb inflation but sharply higher borrowing costs were putting a brake on growth and the economy is expected to stagnate, at best, over the coming quarters.
The M3 measure of money supply, seen in the past as a good indicator of future economic expansion, meanwhile contracted by 1.3%, underperforming expectations for a minus 1.0% reading.