Bank loans to the euro zone private sector increased further in November, the European Central Bank said today, a sign the financial sector is slowly returning to normal despite the debt crisis.
Lending rose by 2% from the same month a year earlier, compared with a revised 1.5% in October, an ECB spokesman said, pursuing a trend that began in April.
A breakdown of the data showed that growth of loans to households declined slightly, however, to 2.7% from 2.9%, with the increase in lending for mortgages dipping to 3.4% from 3.6%.
Loans to non-financial corporations showed a slight contraction of 0.1% last month, but that was an improvement from the decline of 0.5% in October.
Analysts noted that the figures are 'a welcome limited step in the right direction. 'This raises hopes that euro zone banks may be becoming more willing to lend to what they perceive to be less risky businesses,' they added.
The ECB also said that euro zone money supply as measured by its M3 indicator grew by 1.9% in November, up markedly from the October reading of 0.9%. The ECB regards this figure as a key guide to pressures likely to affect inflation in the medium term.
Lending and money supply data are widely-followed indicators of consumer demand and overall economic activity. Rising figures point to increased demand, which normally means inflation could also begin to pick up and incite the ECB to raise interest rates.
The ECB has kept its key interest rate at a historic low of 1% since May 2009 and economists do not expect a change in the near future.
