Eurozone private loans grew 3.1% year-on-year in July, exceeding the 2.9% forecast and accelerating from June’s revised 2.8%, European Central Bank data showed. Lending to non-financial corporations increased 2.9%, while household credit rose 3.4%, suggesting demand for financing has held up despite elevated borrowing costs. The improvement follows sluggish credit growth in late 2024 and early 2025, when the ECB’s aggressive rate hikes weighed on lending activity, and indicates that monetary-policy transmission may be stabilizing as borrowers adjust to higher rates. The stronger data could give policymakers room to consider measured future rate cuts, although inflation remains above the ECB’s 2% target and the policy path is data-dependent. Markets will watch the ECB’s September meeting for changes to its guidance. The figures contrast with the existing July M3 reading, which showed three-month annualized money-supply growth accelerating to 3.2% from a revised 3.0% in June, still below pre-pandemic rates of 4% to 5%. Together, the indicators point to gradually improving but not excessively loose financing conditions. Easier credit could support business expansion, working capital, household spending and the eurozone’s modest recovery, while higher repayment costs continue to pressure new and variable-rate borrowers.