{"id":1922726,"date":"2023-05-02T10:26:56","date_gmt":"2023-05-02T14:26:56","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/soft-lending-and-inflation-data-pave-way-for-smaller-ecb-hike\/"},"modified":"2023-05-02T10:32:55","modified_gmt":"2023-05-02T14:32:55","slug":"soft-lending-and-inflation-data-pave-way-for-smaller-ecb-hike","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/soft-lending-and-inflation-data-pave-way-for-smaller-ecb-hike\/","title":{"rendered":"Soft lending and inflation data pave way for smaller ECB hike"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">22<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fsoft-lending-and-inflation-data-pave-way-for-smaller-ecb-hike%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1922726&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"entry-content\">\n<h2>Euro Zone Banks Tighten Credit Taps<\/h2>\n<p>By Francesco Canepa and Balazs Koranyi<\/p>\n<p>Euro zone banks are turning off the credit taps and a key gauge of inflation is finally falling, data showed on Tuesday, boosting the case for a <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-on-track-for-rate-hike-downshift\/\" title=\"Fed on Track for Rate-Hike Downshift\">smaller interest-rate increase<\/a> by the European Central Bank later this week.<\/p>\n<div id=\"div-gpt-ad-1663871513696-art-1\" style=\"min-width: 320px; min-height: 50px;  text-align: center;\">\n\t\t\t<script>googletag.cmd.push(function() { googletag.display('div-gpt-ad-1663871513696-art-1'); });<\/script>\n\t\t<\/div>\n<p>Core inflation in the euro zone, a closely watched measure that excludes volatile food and energy prices, fell in April for the first time since January 2022 although it remained at an extremely elevated 7.3%, Eurostat\u2019s flash reading showed.<\/p>\n<p>And an ECB survey of lending data for March revealed banks were tightening access to credit even as demand for it from borrowers collapsed, resulting in the slowest pace of growth in credit to households since 2018.<\/p>\n<p>Tuesday\u2019s data indicated the steepest surge in borrowing costs in the ECB\u2019s history was starting to take its toll on the economy.<\/p>\n<p>This could allow the ECB to follow the U.S. Federal Reserve in raising rates by just a quarter of a percentage point after a run of bigger hikes, and to continue a gradual winding down of its crisis-era stimulus measures \u2014 a process known as quantitative tightening (QT).<\/p>\n<p><strong>\u201cThe ECB should move more cautiously from here, with data dependent 25bp hikes and gradual QT,\u201d<\/strong> Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management, wrote on Twitter.<\/p>\n<h3>Effects Become Visible<\/h3>\n<p>Yet the effects of the ECB\u2019s <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/soft-lending-and-inflation-data-pave-way-for-smaller-ecb-hike\/\" title=\"Soft lending and inflation data pave way for smaller ECB hike\">past rate hikes \u2014 worth 350 basis points<\/a> since July 2022 \u2014 were starting to become visible.<\/p>\n<ul>\n<li>The ECB\u2019s Bank Lending Survey (BLS) for the first quarter showed a net 38% of banks in the 20 countries that share the euro reported a decline in demand for credit from companies in the first three months of this year, the biggest proportion since the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/milton-friedmans-revenge\/\" title=\"Milton Friedman\u2019s Revenge\">global financial crisis<\/a> of 2008-09.<\/li>\n<li>\u201cThe general level of interest rates was reported to be the main driver of reduced loan demand, in an environment of monetary policy tightening,\u201d the ECB said.<\/li>\n<li>Banks were making it harder for the companies that did apply to get a loan or credit line, with a net 27% of lenders reporting tighter credit standards.<\/li>\n<li>This matched the previous quarter at levels not previously seen since the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/analysis-under-water-how-the-bank-of-england-threw-markets-a-lifeline\/\" title=\"Analysis-Under water: how the Bank of England threw markets a lifeline\">euro zone debt crisis<\/a> in 2011.<\/li>\n<li>And it was mirrored by March lending data, which showed growth in corporate credit slow to 5.2% year on year.<\/li>\n<\/ul>\n<p>Banks were partly blaming the ECB\u2019s \u201cquantitative tightening\u201d \u2014 which has seen it discontinue multi-year loans for banks known as Targeted Longer-Term Refinancing Operations (TLTRO) and stop replacing bonds that mature from its multi-trillion portfolio.<\/p>\n<p>\u201cWith the next big TLTRO expiring towards the end of June amid further key rate hikes, credit demand will be further dampened,\u201d Martin Wolburg, senior economist at Generali Investments, said.<\/p>\n<p>Demand for home mortgages collapsed further in the first quarter, with a net 72% of banks surveyed reporting a decline, as households became pessimistic about the prospects for the property market.<\/p>\n<p>There was a smaller decrease in demand for consumer credit and other lending to households.<\/p>\n<p>\u201cRising interest rates, weakening housing market prospects, low consumer confidence and a decline in spending on durable consumer goods contributed negatively to the demand for loans to households,\u201d the ECB said.<\/p>\n<p>Lending data also showed the annual increase in lending to households slowing to 2.9% from 3.2%.<\/p>\n<p>In a hopeful development for the ECB, processed food, alcohol and tobacco inflation slowed a full percentage point to 14.7%, suggesting that a long-awaited turnaround in food prices may now be happening.<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<h2>Other News<\/h2>\n<ul>\n<li>Multiple people in positions of power are found to have hob knobbed with Jeffrey Epstein\u2026 while he was a known sex offender.<\/li>\n<li>The White House is unconcerned with new spy balloons and Google\u2019s own Dr. Frankenstein warns others about the monster he\u2019s created.<\/li>\n<li>Florida lawmakers are very close to handing Governor Ron DeSantis the country\u2019s toughest immigration bill from any state.<\/li>\n<li>More female inmates are opening up about the disaster brewing behind bars.<\/li>\n<li>Deputy Director of Concerned Veterans of America John Byrnes is urging Congress to fix a system that\u2019s denying healthcare.<\/li>\n<li>A pioneer of artificial intelligence said he quit Google to speak freely about the technology\u2019s dangers, after realising that computers\u2026<\/li>\n<li>The European Union and U.S. have warned Malaysia over risks to national security and foreign investment as it finalises a review\u2026<\/li>\n<\/ul><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Are you tired of the same old routine? 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