FRANKFURT (Reuters) - Corporate lending growth slowed in the euro zone last month, European Central Bank data showed on Wednesday, in what could be an early sign that a worsening economic outlook is starting to take its toll on credit.
Loans to companies increased by 3.9 percent year-on-year in October, the slowest pace since May, after hitting a post-crisis high of 4.3 percent in September.
One weak reading was unlikely to derail the ECB’s plans to stop its 2.6 trillion euro (2.30 trillion pounds) bond-buying program at the end of December and raise interest rates for the first time since 2011 sometime after next summer.
But it added to a constellation of indicators showing that the euro zone economy is slowing, which has already prompted investors to push back expectations for an ECB rate hike to 2020.
ECB President Mario Draghi said on Monday a “gradual slowdown is normal” and some of it may even be temporary, indicating the central bank was sticking to its plan.
On a comforting note, growth in credit to households came in at 3.2 percent, stable from September’s revised reading, Wednesday data showed.
And growth in money circulating in the euro zone unexpectedly picked up even as the ECB reduced its bond purchases.
Reporting By Francesco Canepa; Editing by Keith Weir/Mark Heinrich