Eurozone money supply growth slows in November: ECB

29th December 2011, Comments 0 comments

Growth in eurozone money supply, a key indicator of demand in the economy, slowed again in November, the European Central Bank said on Thursday.

The M3 indicator rose 2.0 percent last month, following a gain of 2.6 percent in October.

The slowdown was steeper than expected: analysts polled by Dow Jones Newswires had been pencilling in growth of 2.5 percent for November.

The ECB regards the M3 figure as a key guide to inflation pressures and uses it to set interest rates accordingly.

The central bank seeks to keep eurozone inflation below but close to 2.0 percent but it stood at 3.0 percent in November.

Meanwhile, the rate of growth in eurozone bank loans to the private sector slowed substantially to 1.7 percent in November from 2.7 percent in October, the ECB said.

The central bank cut its benchmark interest rate by a quarter of a percentage point to 1.00 percent earlier this month, arguing that future inflation is likely to slow as the eurozone debt crisis puts the brakes on economic growth in the single currency area.

© 2011 AFP

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