Lending to households and companies in the 17-nation euro areacontracted for the first time in more than two years in May as thesovereign debt crisis curbed demand for credit.
Loans to the private sector declined 0.1 percent from a yearearlier after gaining an annual 0.2 percent in April, theFrankfurt-based European Central Bank said today. That's the firstcontraction since March 2010. From April, loans fell 0.1 percentfor their fourth straight monthly drop.
“This is not good news,” said Thomas Costerg, an economist atStandard Chartered Bank in London. “There's a lack of demand and alack of supply, and it's further supporting evidence for an ECBrate cut next week.”
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