Bank lending in the seventeen countries that share the euro continued to expand in the first month of the year, with the flow of loans to businesses turning positive, according to The Wall Street Journal. On Friday, the European Central Bank reported that eurozone private-sector lending grew by 2.4% in January from the same month the previous year, accelerating from 1.9% growth recorded in the last month of 2010. Peter Vanden Houte of ING Bank said, “The acceleration of credit growth to the private sector lends support to the thesis that the economic recovery is further broadening to domestic demand.”
Loans to businesses grew by an annual rate of 0.4% in January, more than reversing a 0.2% decline and moved the flow of loans to businesses to the highest level since January 2009. The expansion of bank lending to eurozone households accelerated slightly to an annual 3.1%, while lending growth for purchases also inched up to a 3.9% expansion. Howard Archer of IHS Global Insight said, “While January’s lending data are modestly encouraging, concern persists over the general ability and willingness of banks to provide the necessary credit to support improving economic activity.”