European Central Bank publishes SAFE results showing sharper net tightening in euro area bank loan pricing and modestly wider financing gap

The European Central Bank published the results of the fourth quarter of 2025 Survey on the Access to Finance of Enterprises (SAFE), showing euro area firms reported a net tightening in bank loan interest rates and other loan conditions, alongside a modest rise in financing needs and a small perceived decline in availability. Inflation expectations were broadly unchanged across horizons, and the survey also finds artificial intelligence is widely used but typically at low to moderate intensity. Firms reported a net increase in bank loan interest rates of 12% (from 2% in the previous quarter), with similar increases among small and medium-sized enterprises (SMEs) and large firms. A net 28% observed increases in other financing costs (charges, fees and commissions), while collateral requirements increased for a net 14% of firms. The need for bank loans rose to net 3% (from 0%), availability fell to net -2% (from -1%), and the bank loan financing gap widened to net 3% (from 1%); firms expected external financing availability to remain broadly unchanged over the next three months. Expected selling price inflation over the next 12 months averaged 2.9% and wage growth 3.1%, while median inflation expectations were 2.6% one year ahead and 3.0% at both three and five years, with long-term risks still seen as tilted to the upside (net 56%). On AI adoption, 27% of firms reported not using AI, 33% used it very infrequently, 31% moderately and 7% significantly; SMEs were more likely than large firms not to use AI (35% versus 13%). The survey was conducted between 19 November and 15 December 2025 with 5,067 euro area firms, including 4,684 with fewer than 250 employees.