Lending slumps here and across euro zone
Published 29/08/2014 | 02:30
Lending to companies and households in Ireland fell at an annual rate of 11.7pc in July, the strongest decline since August 2011, according to new data from the European Central Bank.
The figures from Frankfurt lend weight to the claims by businesses and individuals that banks are not making new loans but simply rolling over old loans. The banks deny the charge and claim many companies don't want to borrow.
The trend is evident across the euro zone despite rock-bottom borrowing costs.
Lending in Portugal fell at the fastest rate since records started in January 2004 in July, highlighting one of the impediments to growth in the euro zone.
ECB data last week showed that the situation is only slowly improving, particularly in countries hit most by the crisis. Lending in Portugal continued to decline in July, falling by 7.8pc compared to a year earlier, the fastest decline since ECB data records started.
Spain posted a 9pc drop in lending to the private sector in July compared with a decline of 8.9pc in the previous month.
The ECB has cut interest rates to record lows and will offer banks more long-term funding at ultra-cheap rates later this year to encourage them to lend more freely.