Johannes Pöschl
- 12 November 2025
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 7, 2025Details
- Abstract
- Monetary policy affects household credit heterogeneously through multiple channels. On the supply side, monetary policy tightening is typically thought to have a more adverse effect on lower-income households. The ECB Consumer Expectations Survey supports this assumption, with lower-income households reporting tighter constraints on credit access and higher consumer loan rejection rates than households with higher incomes during the recent tightening period. That said, on the demand side, survey responses indicate that lower-income households did not reduce their mortgage loan applications, unlike higher-income households, and in fact even increased their consumer loan applications, during this tightening phase. As a result of these offsetting effects, lower-income households, unlike higher-income ones, did not report a decline in overall loan take-up at a time when borrowing conditions were less favourable. Households in lower-income brackets also increased their share of adjustable-rate mortgage loans during this period.
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
G51 : Financial Economics