ECB reports eurozone business loans fell to 22 billion euros in July

ECB raised rate to 2.25% in June amid higher energy prices tied to the U.S.-Iran war

Bank lending to eurozone businesses fell to 22 billion euros ($25.64 billion) in July, the European Central Bank reported Thursday, down from 27 billion euros in June and 34 billion euros in May.

The decline since May suggests the central bank’s June interest rate increase is beginning to affect business investment. The ECB raised its key interest rate to 2.25% from 2% in June in response to a pickup in the annual rate of inflation as the U.S.-Iran war pushed energy prices higher.

According to the ECB’s figures, the largest decline was in longer-term lending. Loans with maturities of more than five years fell to 9 billion euros in July from 21 billion euros in June — a drop of more than half.

The lending figures arrive ahead of the ECB’s next policy meeting, at which the central bank is expected to raise its key interest rate again. The pullback in longer-maturity loans suggests the move is having an impact on economic activity, particularly investment.