Capital Economics analyst Harry Chambers says the ECB’s Q3 bank lending survey shows demand weakened across most loan categories, weighing on the growth outlook. Housing loan demand posted its largest decline since Q3 2023 and banks expect further fa

2026-10-27

Capital Economics analyst Harry Chambers says the ECB’s Q3 bank lending survey shows demand weakened across most loan categories, weighing on the growth outlook. Housing loan demand posted its largest decline since Q3 2023 and banks expect further falls in Q4. Business investment loan demand also weakened but is expected to rebound. A composite of credit standards and demand suggests the euro-area economy was effectively stagnant in Q3. Chambers says this does not necessarily implies a sustained downturn, but banks’ pessimism raises downside risk to Capital Economics’ prior forecast of 0.2% q/q growth in Q4.