Euro Area Economy Shows Signs of Strengthening as Business Lending Accelerates

The European Central Bank (ECB) has reported that the euro area economy is showing signs of strengthening, particularly in terms of monetary aggregates and business lending.

In July 2026, the M3 monetary aggregate accelerated to 3.4%, up from 3.3% in June. The growth rate of loans to the private sector also increased to 4.1%, with non-financial corporations seeing a notable increase in financing momentum.

The annual growth rate of the broader monetary aggregate M3 stood at 3.4% in July, averaging 3.2% over the past three months. The components of M3 showed varying developments, with household deposits growing at 2.6%, while marketable instruments decreased to 4.2%.

The ECB's data also highlighted a slowdown in growth for the narrower monetary aggregate M1, which comprises currency in circulation and overnight deposits, decreasing to 3.1% in July from 3.5% in June.