08:59 AM EDT, 08/28/2024 (MT Newswires) -- Eurozone bank lending remained muted in July as a small uptick in lending growth to households was offset by a small downtick in lending to non-financial corporates, noted ING.

Overall, both still show lending growth that is well below the historical average. Money growth -- which had been recovering recently -- was stable in July. Broad money (M3) grew by 2.3% again.

While the downward trend in lending growth has ended, there isn't much of a recovery going on right now, wrote the bank in a note. The largest impact from the historic series of rate hikes in 2022 and 2023 is as such behind the eurozone, but with rates still at a very restrictive level there is little relief to be noted from somewhat lower market rates at this point.

The European Central Bank /ECB) lending survey Wednesday shows that banks continue to tighten credit conditions for business borrowing, and demand for loans is also declining. This means that expectations for near-term lending remain muted, stated ING.

Investment has been weak for some time now and the weak lending environment isn't contributing to a speedy recovery, added the bank.

The somewhat lower rate environment will help to boost lending to some degree, but with a steady pace of ECB rate cuts already priced in, it seems unlikely that there will be a significant boost to borrowing from the ECB gently taking its foot off the monetary brake, according to ING.