Eurozone news still surprising positively
Simon Ward
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The ECB’s April bank lending survey, released today, provides further confirmation of a strong economic pick-up. Credit demand, in particular, is surging: the net percentages of banks expecting increased demand for corporate and house purchase loans over the next three months rose to the highest levels recorded in the survey’s 12-year history – see first chart.
Stronger credit demand reflects increased economic confidence and recent falls in lending rates, mostly due to the ECB’s rate cuts and TLTRO liquidity operations. QE is too recent to have been a significant influence.
In other Eurozone news, industrial output rose by 1.1% in February after a downwardly-revised 0.3% fall in January. Output in January / February combined was 0.9% above the fourth-quarter level. Retail sales, meanwhile, were 1.2% higher in January / February than in the fourth quarter. These gains are consistent with first-quarter GDP growth of 0.8%, according to a simple tracking model – second chart. Output and sales, however, may pull back temporarily in March following recent strong rises, lowering the quarterly averages. 
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