26/08/2010
Bank lending in the Eurozone strengthened in July, with a 0.9% rise on the amount loaned in July.
According to AFP, the news is a sign of expanding activity across the Eurozone. The news comes hot on the heels of figures for June which showed a 0.5% growth. July's statistics smashed forecasts made which predicted that the month would see a 0.3% boost to lending.
Further good news was delivered when it was revealed that the European Central Bank's (ECB) M3 money supply indicator, which measures cash, deposits and other financial benchmarks, grew by 0.2% in July which was in line with market forecasts, according to an ECB spokesman.
Lending to business also fared better than last month - loans to non-financial corporations contracted by 0.3% less than they did in June. The news that lending and money supply data have both increased are indicators that economic activity is picking up.
This is good news for British SMEs who trade with Europe, as the boost in economic activity should reflect on orders.
The news might even tempt businesses to transform part of their strategy to include trading with European firms. There are many funding options which businesses can choose from, including traditional business loans, as well as sales finance which boosts cash flow by giving cash advances for invoices sent to clients.
Laura Nineham