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Euro zone business lending rebounds in February

Euro zone business lending rebounds in February

Corporate lending growth in the euro zone rebounded last month, European Central Bank data showed today, easing fears that banks are stopping the flow of credit to corporations amid a growth slowdown.

Corporate lending expanded by 3.7% in February, picking up from 3.4% in January.

But the reading remains well short of its post-crisis peak of 4.3% hit in September.

With growth slowing on weak export demand for manufactured goods, the ECB has already reversed course, putting plans to normalise policy on hold, announcing instead further stimulus measures to aid a still limping economy.

Fearing that banks will shut the flow of credit to firms amid a slowdown, the ECB unveiled plans to give lenders a new line of ultra cheap loans with the ultimate aim of getting cash to firms so they will continue to invest.

Credit growth to households meanwhile rose to 3.3% in February from 3.2% a month earlier, suggesting that the slowdown has yet to significantly dent consumer confidence.

The annual growth rate of the M3 measure of money supply, which often foreshadows future activity, surged to 4.3% from 3.8% a month earlier and beating expectations for growth of 3.9%.

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