Eurozone private sector loans, money supply picking up: ECB

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Bank lending to the eurozone private sector picked up slightly in June, the European Central Bank said on Tuesday, a sign of solid economic activity in the recovering 16-nation bloc.

Lending increased by 0.3 percent from the level in June 2009, a bank spokesman said, following a modest rise of 0.2 percent in May.

Growth of the ECB's M3 money supply indicator, which measures cash, deposits and other financial benchmarks, increased by 0.2 percent in June, the first time it has risen since October 2009.

Lending and money supply data are indicators of consumer demand and overall economic activity.

Falling figures point to lower demand, which normally means inflation will ease and allow the ECB to cut interest rates. Rates are already at a record low of one percent however, and are not expected to be cut further.

The eurozone emerged from recession last year and is now trying to nurture its recovery as leaders tackle excessive deficit and debt in most member countries.

© 2010 AFP

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