Euro-zone borrowing by business grew at a record rate last month in the clearest indication yet that the 15-country region has avoided a credit crunch, despite global financial turmoil.
Lending to non-financial corporations increased at an annual rate of 14.6 per cent in January, the fastest since the launch of the euro in 1999, according to European Central Bank figures.
In December, lending had increased by 14.5 per cent.
The data, indicating companies remained upbeat about the economic outlook, strengthened the ECB's argument that euro-zone economic fundamentals remain "sound".
After a surprise rise in German business confidence this week, that will increase the ECB's reluctance to cut interest rates in the near future, whatever the steps taken by the US Federal Reserve, especially with euro-zone inflation at a 14-year high of 3.2 per cent.
Axel Weber, Germany's Bundesbank president, yesterday became the latest ECB governing council member to signal that the central bank's inflation forecasts would be revised up next month, including for 2009 when the ECB had seen a good chance of inflation back within its target of "below but close" to 2 per cent. Food prices appear a particular concern.
Signs that euro-zone economic activity remains relatively robust will make the ECB less concerned about the euro's rise for the first time above $1.50 yesterday as a stronger currency could help reduce inflation pressures.
Euro-zone growth shows clear signs of slowing from last year's peaks, and the ECB is also expected to reduce its growth forecasts. But this week Lucas Papademos, its vice-president, argued that the economic impact of financial market turmoil "is not likely to be sizable".
