The energy shock has mainly resulted in precautionary behaviour on the part of firms, which increased their inventories in March
This reflects the sharp rise in input costs (which are still below their 2022 levels, however). In the short term, the build-up of corporate inventories (prior to the acceleration in inflation) has supported production. The rise in energy prices does not appear, at this stage, to have affected household spending behaviour.
Macroeconomic pressures have led to a marked slowdown in housing loans and a decline in consumer and business lending
Whilst interest rates remain stable, new loans to households for house purchase continued to slow on a year-on-year basis in February. Consumer loans continue to decline sharply. Year-on-year, net bank lending to businesses fell for the second consecutive month in February, a situation which had not been seen since 2015. This decline is only being marginally offset by the modest year-on-year rise in net debt-security issues.
