ECB: Eurozone Loans to Private Sector Down in June
Eurozone bank loans to the private sector contracted last month, new data showed Thursday, even as growth in Eurozone money supply, a key indicator of demand in the economy, picked up unexpectedly.
The European Central Bank, in its regular monthly money supply data, calculated that growth in Eurozone bank loans contracted by 0.2 percent in June after shrinking by 0.1 percent in May.
That figure suggests Eurozone lending to the private sector has dried up, despite the vast amounts of cheap cash banks in the bloc borrowed from the ECB earlier this year.
At the same time, the Eurozone money supply is growing, the data showed, with the broad M3 indicator rising 3.2 percent last month, following a gain of 3.1 percent in May.
The acceleration was unexpected -- analysts polled by Dow Jones Newswires had been penciling in a slight slowdown in growth to a rate of 2.9 percent for June.
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 2.4 percent in June.