Lending to eurozone businesses fell in July, a sign that rising borrowing costs might be weakening the currency area's economy ahead of a meeting of the European Central Bank, which is expected to again raise its key interest rate.

The ECB on Thursday said that bank loans to businesses totaled 22 billion euros ($25.64 billion) during the month, down from 27 billion euros in June and 34 billion euros in May.

The central bank raised its key interest rate to 2.25% from 2% in June, responding to a pickup in the annual rate of inflation as the U.S.-Iran war pushed energy prices higher.

The sharp decline in bank lending to businesses since May suggests this move is having an impact on economic activity, particularly on investment.

According to the ECB's figures, the largest drop was seen in loans with a maturity of more than five years, which fell to 9 billion euros in July from 21 billion euros in June.

Eurozone businesses rely more heavily on bank lending to fund investment than their counterparts in the U.S., where the bond markets play a larger role.

ECB policymakers have said little during the August vacation period, although investors continue to expect to see another rise in the key rate to 2.5% on Sept. 10.

At its July meeting, the ECB said future rate decisions would take into account "the strength of monetary policy transmission," or the scale of the impact of its June rate rise.

The ECB's figures showed that lending to households was unchanged at 17 billion euros in July, including a slight increase in mortgage loans.