This effectively ended the sector's biggest borrowing binge in more than a decade as rising interest rates and a possible recession appear to be taking their toll.
Lending to businesses in the currency bloc expanded by 6.3% in December after an 8.3% reading a month earlier, while household credit growth slowed to 3.8% from 4.1%. "Now we see sharp declines in borrowing occurring, which is in fact more of a recessionary sign," he added. Rate hikes take up to 18 months to feed into the broader economy so a further drag on lending is likely, especially as the ECB is far from done with rate increases.
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ECB needs to continue rate hikes next week - MakhloufThe Governor of the Central Bank has said the European Central Bank needs to continue to increase interest rates when its Governing Council meets in Frankfurt next week.
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