Lending to euro zone companies continued to slow last month, European Central Bank data showed today.

This extended a downward trend and likely raising concern among policymakers about banks' reluctance to extend credit.

Lending growth to firms slowed to 1.7% in July from 1.8% in June while the monthly flow of adjusted loans dipped to €8 billion from €11 billion a month earlier.

Lending growth now stands at around half of pre-pandemic levels.

Meanwhile, lending to households continued to accelerate, picking up to 4.2% from 4%, a 13-year high.

The annual growth rate of the M3 measure of money supply, mostly a reflection of the ECB's copious bond purchases, slowed to 7.6% from 8.3%, not far from market expectations for 7.7% growth.