Bank lending in the eurozone fell slightly in January but at a slower pace than a month earlier, suggesting the economy may be turning a corner as consumer morale picks up in the bloc’s largest economies.
European Central Bank President Mario Draghi said that “all in all, the outlook is more positive than it was a few months ago” in the 19-country eurozone, which has been blighted by recession in the south and falling prices.
Sparse lending to firms continues to dog the economy, but data released by the ECB yesterday showed the overall level of lending to households and firms in the eurozone fell by 0.1 per cent in January from a year earlier, after a 0.5 per cent drop in December. Lending has not risen since July 2012.
“We have been seeing an across-the-board improvement to banks’ willingness to lend and also in the demand for credit,” said Reinhard Cluse, an economist with UBS.
“We are making good progress in healing the European banking sector but we are coming from a very low base. The way to recovery is still long. We shouldn’t expect any miracles.”
German consumer sentiment jumped to its highest level in more than 13 years heading into March, a separate report showed, as low oil prices freed up consumer cash to spend on other things.
Consumer confidence hit a near three-year high in France this month and rose sharply in Italy.