MNI BRIEF: ECB Transmission Uneven Across Incomes - Bulletin

Tighter monetary policy had an uneven impact across households in the euro area, with lower-income families maintaining or even increasing borrowing despite less favourable conditions, the European Central Bank's latest Economic Bulletin pre-release notes.

According to Consumer Expectations Survey analysis , lower-income households increased applications for consumer credit from 2022 onwards, while higher-income families curtailed demand for both consumer and mortgage loans, the bulletin said on Wednesday.

Lower-income households also saw “a substantial drop in consumer loan acceptance rates”, while applications for adjustable-rate mortgages rose, contrasting with higher-income households benefitting from easier credit conditions and lower rejection rates, underscoring “the uneven transmission of monetary policy to household credit”. (see MNI PODCAST: ECB Economist On Consumer Inflation Expectations )