Tougher lending and shrinking profits test euro area businesses - EU Perspectives

The ECB surveyed 12,822 businesses across the euro area, with small and medium-sized enterprises accounting for 93 per cent of respondents / Photo: Sara Kozak (Unsplash) Euro area businesses face higher borrowing costs and falling profits, yet investment continues to grow, albeit modestly. The ECB’s latest survey also flags a caveat: changes in respondents complicate its findings on price and inflation expectations. The ECB’s survey , published on 26 October, found that a net 46 per cent of firms reported rising bank-loan interest rates, up from 42 per cent in the previous quarter. The figures are balances: the share reporting an increase minus the share reporting a decrease. They do not measure how much interest rates rose.