Euro area firms reported higher bank loan interest rates and other borrowing costs in the final quarter of 2025.
Interest rates on bank loans rose on balance, with a net 12% of firms reporting an increase, up from net 2% in the previous quarter, according to the European Central Bank’s latest Survey on the Access to Finance of Enterprises (SAFE).
A net 28% of firms also reported higher non-interest financing costs such as charges, fees and commissions, up from 23%, the ECB reported on Monday.
Collateral requirements — assets pledged to secure a loan — were also reported to be higher, with a net 14% of firms seeing an increase, compared with 16% in the third quarter of 2025.
Firms’ need for bank loans rose modestly, with a net 3% reporting higher demand compared with net 0% previously, while availability was seen to fall slightly, at net -2% versus net -1% in the previous quarter, the ECB said.
That pushed the bank loan “financing gap” — an index measuring the difference between need and availability — up to net 3% from net 1%.
Inflation expectations and AI use
Firms’ median expectations for euro area inflation one year ahead edged up to 2.6% from 2.5%, while expectations for three and five years ahead were unchanged at 3.0%, according to the survey results.
For the five-year horizon, a net 56% of firms said risks to the inflation outlook were tilted to the upside, up from 53%.
Firms expected their selling prices to rise by 2.9% on average over the next 12 months, unchanged from the previous survey round, while wage expectations increased to 3.1% from 3.0%.
Expected growth in non-labour input costs eased to 3.6% from 3.8%.
The survey also asked firms about artificial intelligence use, finding that 27% did not use AI, 33% used it very infrequently, 31% moderately and 7% significantly.
Small and medium-sized enterprises were more likely than large firms not to use AI — 35% compared with 13% — though the share making significant use was similar across both groups.
The results come from the 37th SAFE survey round, conducted between 19 November and 15 December 2025, covering 5,067 euro area firms, of which 92% had fewer than 250 employees.
