Friday, July 25, 2025 5:37 PM EDT
Image Source: Unsplash
Bank lending growth to the private sector has recently shown signs of slowing, with May experiencing an outright decline month-on-month in terms of lending volumes to non-financial corporates. But a strong rebound in June has eased concerns that uncertainty about the global economy – and tariffs in particular – was hindering proper monetary transmission.
But the view is more nuanced than that. The data is volatile, and taking a three-month average, we do still note some moderation in bank lending growth. However, while uncertainty dampens investment appetite, there is no clear sign that demand for credit is falling quickly. In fact, the year-on-year growth rates that the ECB reports in its press release are still increasing. And the ECB bank lending survey, out earlier this week, also indicated that borrowing appetite remains decent.
The ECB, having kept rates on hold yesterday, will happily take more information about this uncertain economy on board ahead of the September meeting. During this meeting, the debate about whether to implement another rate cut will be back on the table. More data on bank lending will come in before then, which may provide a clearer view on whether uncertainty impairs monetary transmission or not. For now, the picture isn't too alarming.
More By This Author:
Federal Reserve Preview: Fed To Hold The Line, But Cuts Are Coming Asia Week Ahead: US-China Trade Talks And Key Data From Japan, South Korea, Taiwan Hungarian Labor Supply And Demand Softens
Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...
more
Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any particular user's investment objectives, financial situation, or means. ING forms part of ING Group (being for this purpose ING Group NV and its subsidiary and affiliated companies). The information in the publication is not an investment recommendation and it is not investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Reasonable care has been taken to ensure that this publication is not untrue or misleading when published, but ING does not represent that it is accurate or complete. ING does not accept any liability for any direct, indirect or consequential loss arising from any use of this publication. Unless otherwise stated, any views, forecasts, or estimates are solely those of the author(s), as of the date of the publication and are subject to change without notice.
The distribution of this publication may be restricted by law or regulation in different jurisdictions and persons into whose possession this publication comes should inform themselves about, and observe, such restrictions.
Copyright and database rights protection exists in this report and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of ING. All rights are reserved. ING Bank N.V. is authorised by the Dutch Central Bank and supervised by the European Central Bank (ECB), the Dutch Central Bank (DNB) and the Dutch Authority for the Financial Markets (AFM). ING Bank N.V. is incorporated in the Netherlands (Trade Register no. 33031431 Amsterdam). In the United Kingdom this information is approved and/or communicated by ING Bank N.V., London Branch. ING Bank N.V., London Branch is deemed authorised by the Prudential Regulation Authority and is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. The nature and extent of consumer protections may differ from those for firms based in the UK. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.. ING Bank N.V., London branch is registered in England (Registration number BR000341) at 8-10 Moorgate, London EC2 6DA. For US Investors: Any person wishing to discuss this report or effect transactions in any security discussed herein should contact ING Financial Markets LLC, which is a member of the NYSE, FINRA and SIPC and part of ING, and which has accepted responsibility for the distribution of this report in the United States under applicable requirements.
less
How did you like this article? Let us know so we can better customize your reading experience.
