Developments in credit growth in August tend to confirm that the demand for loans remains strong, supported by low bank lending rates, indicating that euro area residents do not face borrowing constraints. On balance, the Governing Council believes that monetary conditions, especially the sustained growth of M3 in excess of the reference value, signal a rather generous liquidity situation in the euro area.
Long-term nominal interest rates in the euro area continued to increase in September. While it is likely that this increase is related to expectations of a recovery of activity in the euro area, expectations of increasing inflationary pressure may also play a role.