Lending to euro zone households and firms accelerated slightly in July in a sign the ECB's aggressive asset-purchase programme is bringing some results. As Sonia Legg reports there was also positive economic data from Spain and France.
It's seen as key to the euro zone's recovery and it seems bank lending is on the up. New data shows the rate of lending last month grew at its fastest pace since early 2012. Credit to companies was 0.9 percent - up from 0.2. It continues a trend started in 2014 when the ECB announced its asset-buying programme But banks remain constrained, says Commerzbank's Peter Dixon. (SOUNDBITE) (English) COMMERBANK, GLOBAL FINANCIAL ECONOMIST, PETER DIXON, SAYING: "They are no opening their taps in quite the same way as the ECB would like and I think we need to see a lot more data showing further increases before we can say that the QE policy is working." The ECB has another problem too - headline inflation. It stands at 0.2 percent - weighed down by an oil slump and a slowing global economy Many believe more stimulus may be on cards, although the euro zone's recovery seems to be on track New data shows Spain's economy growing at its fastest rate since 2007. Second quarter growth was 1 percent. But there is a but - it's consumer led. (SOUNDBITE) (English) COMMERBANK, GLOBAL FINANCIAL ECONOMIST, PETER DIXON, SAYING: "If you want a rebalancing of the economy then a sharp pick up in spending isn't necessarily the way to go so perhaps what we are seeing is some good work in Spain being magnified by a short-term cyclical boost which overinflates the degree of recovery that we are seeing there." Good news from France - business morale at a four year high - also came with a qualification. A long-awaited recovery in business investment remains elusive. And the euro zone's second biggest economy is still seen by many as a weakest spot in the euro zone.