Euro area firms reported higher bank loan rates and rising costs expectations in the first quarter of 2026.
Interest rates on bank loans rose for a net 26% of firms, up from 12% in the previous quarter, with similar reports from small and medium-sized enterprises and large companies, according to the European Central Bank’s latest Survey on the Access to Finance of Enterprises.
A net 37% of firms also reported increases in other borrowing costs such as charges, fees and commissions, up from 28%, the ECB said on Monday.
Collateral requirements — assets pledged by a borrower to secure a loan — increased for a net 14% of firms, unchanged from the previous quarter.
Firms reported stable demand for bank loans, with a net 0% saying their financing needs increased, down from 3% in the previous quarter.
The perceived availability of bank loans deteriorated slightly, with a net -3% reporting a decline, compared with -2% previously.
The ECB’s bank loan financing gap — an index measuring the difference between firms’ need for loans and their availability — remained positive but edged down to 2% from 3%.
Prices and inflation expectations moved higher
The general economic outlook remained the main factor firms said was constraining access to external finance, cited by a net 26% of respondents, up from 20% in the previous survey round, the ECB said.
Firms reported a small improvement in banks’ willingness to lend, with a net 5% seeing it as supportive, up from 4%.
Turnover was broadly unchanged over the previous three months, with a net 1% of firms reporting an increase, down from 7% in the previous quarter. A net 16% reported lower profits, up from 10%, while investment rose for a net 3% of firms, down from 6%.
Looking ahead 12 months, firms expected selling prices to rise by 3.5%, up from 2.9% in the previous quarter.
Expected increases in non-labour input costs — including energy — rose to 5.8% from 3.6%, while expected wage growth moderated to 2.8% from 3.1%.
The war in the Middle East increased firms’ selling price and input cost expectations, without affecting wage expectations.
Median one-year-ahead inflation expectations rose to 3.0% from 2.6%, while median three- and five-year-ahead inflation expectations were unchanged at 3.0%.
The share of firms reporting upside risks to five-year inflation expectations rose to 65% from 56%.
The survey covered 10,544 euro area firms and was conducted between 19 February and 1 April 2026, with 92% of respondents employing fewer than 250 people.
