Euro zone businesses have shrugged off the impact of the credit crunch and are taking out new loans at their fastest rate in at least eight years, figures showed today.
European Central Bank data show growth in business lending hit a record high in December, despite five months of turmoil on financial markets which has prompted banks to tighten credit standards and pushed up market interest rates.
Overall lending growth to the private sector held steady at 11.1 per cent for the year to December, the sixth month running at rates at or above 11 per cent and defying economists' expectations for it to ease.
The only sign of weakness came in home borrowing - mortgage growth fell to the lowest since euro zone records began in 2000 as higher market rates pushed up variable-rate loan costs, also reflecting weaker real estate markets in Spain and Ireland. Other consumer credit rose, however.
Economists said strong loan growth would help the European Central Bank resist calls to cut interest rates from their current 4 per cent level any time soon, despite policy easing from other major central banks.
Adding to the argument is continued expansion in M3 money supply, although this slowed much more sharply than economists expected, to 11.5 percent growth in December from the record highs of 12.3 per cent set in October and November.
Economists had not expected M3 growth to slow that much, with the median forecast predicting only a slowdown to 12.2 per cent.