Eurozone businesses are facing slightly higher bank loan costs but remain steady in their expectations for future inflation, according to the latest findings from the European Central Bank.
The survey published on Monday by the ECB shows that firms are experiencing a minor increase in interest rates on bank loans.
Small and medium-sized companies saw rates inch up, while larger firms actually reported a slight decrease in borrowing costs.
Alongside interest rates, additional charges and collateral requirements for loans also rose, indicating that obtaining finance has become somewhat more expensive and demanding for some businesses, the ECB said.
Despite these changes, businesses’ need for bank finance and their ability to get loans remained largely unchanged over the third quarter of 2025.
The report notes that the “financing gap” — the difference between firms wanting funding and being able to secure it — saw only a marginal shift, suggesting no major obstacles to borrowing for most companies.
Profits down, investment up
The ECB noted that when asked about the general economic environment, firms identified the overall outlook as the main hurdle to obtaining external funding, with nearly one in five seeing it as a constraint.
Although banks’ willingness to lend improved slightly, companies remained cautious, especially as their own forecasts for sales and profits worsened compared to previous months.
The survey also found stable turnover for most businesses, meaning sales did not increase or decrease overall.
However, more companies reported a decline in profits, while investment in growth and equipment modestly increased.
Although optimism about future developments has risen since the last survey round, expectations for access to new investment finance have cooled.
The ECB’s findings reveal that businesses expect to moderately increase their selling prices and pay higher wages over the coming year, with non-labour costs (like energy and materials) climbing as well.
On average, expected selling price growth rose to 2.9 percent, while wage growth expectation moved up to 3 percent.
Importantly, firms’ inflation expectations — their forecasts for how much prices will rise in the wider economy — remained stable across one-, three-, and five-year timeframes.
The median expectation for annual inflation one year from now held steady at 2.5 percent, with longer-term views unchanged at 3 percent.
Over half of respondents still see risks of higher-than-expected inflation in the longer term.
According to the ECB, this latest survey, conducted from August to October and covering more than 10,000 euro area companies — mostly small and medium-sized — provides a snapshot of how European businesses are navigating a period of higher borrowing costs but relatively steady economic expectations.
