Bank lending to companies in the eurozone slowed for the fourth month in a row during February, as an economic downturn and increased caution from banks appear to be taking their toll, European Central Bank (ECB) data showed on Monday.

Credit to the private corporate sector decelerated to an annual rate of 3.3 per cent in February, the slowest since August 2021, down from 3.8 per cent in January. Further data showed that the money supply, as measured by M3, increased at the slowest pace since October 2014. M3 grew by an annual rate of 2.9 per cent, weaker than last January’s 3.5 per cent increase.

“Due to the turmoil in the financial system, banks in the eurozone could further tighten the conditions for granting loans, which would slow down economic growth and inflation,” ECB vice president Luis de Guindos said in an interview.

Meanwhile, the prices of homes in the US fell for the seventh consecutive month in January, in spite of the recent pullback in mortgage rates, data provided by S&P CoreLogic Case-Shiller showed on Tuesday.

The US National Home Price Index showed that house prices fell 0.5 per cent in January compared to the prior month, as high mortgage rates discouraged homebuyers. “2023 began as 2022 had ended, with US home prices falling for the seventh consecutive month,” says Craig J. Lazzara, managing director at S&P DJI.

Finally, in the UK, supermarket price inflation has scaled another record high in March, pushing the increase in the average annual household bills to £837, even though shoppers increasingly tap multiple supermarkets in their quest for bargains.

Shop price inflation accelerated to a record annual rate of 8.9 per cent in March, the British Retail Consortium (BRC) said. This was an increase from the 8.4 per cent reading reported in February.

In the meantime, inflation in food prices soared to 15 per cent in March, up from 14.5 per cent in February. This is also the highest inflation rate of the data series in the food category, said the BRC.

However, BRC chief executive Helen Dickson said “food price rises will likely ease in the coming months, particularly as we enter the UK growing season, but wider inflation is expected to remain high”.

This article does not constitute legal and/or financial advice and is being issued for information purposes only by Bank of Valletta plc, 58, Zachary Street, Valletta. Bank of Valletta is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap. 370 of the Laws of Malta).