Tentative improvements show that monetary easing in the eurozone is having an effect but that more needs to be done for investment to undergo a more meaningful recovery in 2025.
Bank lending in the eurozone showed some improvement in September as non-financial corporates saw a strong increase in month-on-month lending, and lending to households continued its cautious accelerating trend. Still, this kind of monthly data is volatile and annual growth rates remain very subdued at 1.1 and 0.7% growth, respectively, for corporates and households. While this is increasing, it is only comparable to levels seen in 2015-16. We were seeing faster growth in bank lending before 2023. Needless to say, this is not yet translating into a buoyant investment rebound.
The European Central Bank recently released its bank lending survey, which showed some tentative improvements in the lending environment. Banks did not tighten credit standards for the first time in over two years, and demand for borrowing is cautiously improving, especially for households. This indicates that the start of the cutting cycle is starting to show some early signs of impact on the early parts of the lending channel.
The ECB has taken note of the weak recovery in bank lending. At the moment, it looks like the ECB is rushing towards a neutral rate as concerns about economic growth have taken over from inflation fighting. With bank lending muted but showing cautious signs of improvement, the ECB is likely to take today’s data release as encouragement that taking their foot off the monetary brake further will have an impact on the prospect of improving economic activity.
Read the original analysis: Cautious increases in eurozone bank lending will do little to support growth
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/content-disclaimer/
Recommended Content
Editors’ Picks

EUR/USD stays below 1.0500 as markets assess German election outcome
EUR/USD struggles to build on earlier gains and stays below 1.0500 on Monday as markets assess German Conservatives Party's win in the federal election, which revived hopes for better economic outlook. The upside remains elusive due to a cautious mood and mixed German IFO data.

GBP/USD retreats below 1.2650 as markets await comments from BoE officials
GBP/USD retreats from the multi-month high it touched earlier and trades below 1.2650 on Monday. The pair eases as the US Dollar pauses its decline but the downside appears limited ahead of speeches from several BoE policymakers.

Gold climbs to an all-time high near $2,960
Prices of Gold glimmered higher on Monday, hitting an all-time high around $2,955 per ounce troy on the back of the US Dollar's inconclusive price action as investors are warming up for a key inflation report due toward the end of the week.

Bitcoin Price Forecast: BTC standoff continues
Bitcoin has been consolidating between $94,000 and $100,000 since early February. Amid this consolidation, investor sentiment remains indecisive, with US spot ETFs recording a $540 million net outflow last week, signaling institutional demand weakness.

Money market outlook 2025: Trends and dynamics in the Eurozone, US, and UK
We delve into the world of money market funds. Distinct dynamics are at play in the US, eurozone, and UK. In the US, repo rates are more attractive, and bills are expected to appreciate. It's also worth noting that the Fed might cut rates more than anticipated, similar to the UK. In the eurozone, unsecured rates remain elevated.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.