The amount of outstanding debt in the euro zone grew at its fastest rate for more than two years in February amid more debt issuance from banks, according to European Central Bank data published today.
The annual growth rate of outstanding debt securities issued by euro area residents increased to 7.5 per cent in February to a total €9.649 trillion, versus 7.2 per cent growth in January.
The net amount of debt outstanding last grew this fast in November 2002. Separate data released by the ECB yesterday showed foreign investors piling into euro zone debt securities in February.
The ECB studies credit growth data to get an idea of potential sources of inflationary pressure. Euro zone inflation was 2.1 per cent in March, slightly above the ECB's 2 per cent threshold, although visible inflation pressures in the domestic economy remain low.
The central bank has held its benchmark interest rate at 2.00 per cent since June 2003 in the hope that cheap borrowing costs would support economic recovery.