Euro Zone Businesses Still Borrowing

FRANKFURT -- Euro zone businesses have shrugged off the impact of the credit crunch and are taking out new loans at their fastest rate in at least eight years, though homebuyers are feeling the pinch, figures showed on Monday.

European Central Bank data show business lending growth hit a record high in December, despite five months of turmoil on financial markets, which has prompted banks to tighten credit standards and pushed up interest rates.

Overall lending growth to the private sector held steady at 11.1 percent for the year to December, the sixth month running at rates at or above 11 percent and defying economists' expectations for it to ease.

The only sign of weakness came in home borrowing – mortgage growth fell to the lowest since euro zone records began in 2000, as higher market rates pushed up variable-rate loan costs, also reflecting weaker real estate markets in Spain and Ireland. Other consumer credit rose, however.