Eurozone Bank Lending Picks Up Pace

Lending by eurozone bank to households and companies grew faster in August than the previous month, figures from the European Central Bank showed Wednesday.

Overall credit to the private sector grew 2.7 percent year-on-year last month, adjusting for some purely financial transactions -- an increase of 0.1 percentage point over July's pace.

July had already seen a 0.1-percentage point increase in growth from the previous month's figure.

Policymakers watch lending growth closely for signs the ECB's massive interventions in the single currency area's economy are working as intended.

The ECB hopes more credit should power the economy and boost inflation towards its target of just below 2.0 percent, believed to be most favourable rate for growth.

Looking in more detail, lending to households grew at the same 2.7-percent year-on-year rate last month as in July, still in adjusted terms.

Expansion in credit for general consumption held steady at 6.7 percent, while mortgage lending growth sped up from 3.1 to 3.4 percent.

Meanwhile, loans to non-financial corporations continued accelerating last month, adding 0.1 percentage point to reach 2.5 percent growth, continuing July's recovery from a June slump.

With cheap loans to banks, record low interest rates and monthly bond purchases of 60 billion euros ($71.5 billion), ECB policymakers have sought to pump cash through the financial system and into the real economy.

The ECB has strongly hinted that it will begin winding down bond-buying in October, although inflation in the 19-nation eurozone remains well short of its target.

Inflation in the euro area reached 1.5 percent in August.